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Kvartalsrapport Q3 2024
===== SIDA 1 ===== INTERIM REPORT INTERIM REPORT INTERIM REPORT INTERIM REPORT JUL JUL JUL JULYY YY –– –– SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER 202 202 202 20244 44 ===== SIDA 2 ===== INTERIM REPORT JULY – SEPTEMBER 2024 Humble Group AB Interim Report July - September 2024 Stockholm, Oct 31, 2024 HIGH DEMAND AND IMPROVED PROFITABILITY Financial information Third quarter Net sales amounted to MSEK 1,978 (1,811), an increase with 9% compared to the corresponding period last year. The organic growth for the period was 10%. EBITA amounted to MSEK 146 (132). EBIT amounted to MSEK 96 (85). Adjusted EBITA amounted to MSEK 154 (139), an increase with 11% compared to the corresponding period last year. Cash flow from operating activities amounted to MSEK 142 (175). Profit and loss after tax amounted to MSEK 27 (-91). Earnings per share before and after dilution amounted to SEK 0.06 (-0.20). Nine months Net sales amounted to MSEK 5,678 (5,114), an increase with 11% compared to the corresponding period last year. The organic growth for the period was 11%. EBITA amounted to MSEK 418 (391). EBIT amounted to MSEK 271 (252). Adjusted EBITA amounted to MSEK 422 (361), an increase with 17% compared to the corresponding period last year. Cash flow from operating activities amounted to MSEK 153 (802). Profit and loss after tax amounted to MSEK 82 (-95). Earnings per share before and after dilution amounted to SEK 0.18 (-0.27). Significant events During the third quarter The Board of Directors of Humble Group decide to adopt new financial targets. The new targets aim to reflect the Company's objective regarding growth and profitability and to reflect the Company's medium- term business plan. See more on page 9. On September 27th, Humble Group changed list from First North to Nasdaq Stockholm Main market. After the quarter No significant event has occurred after the quarter. Financial overview Last Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023Net sales1,978 1,811 5,678 5,114 7,614 7,050Gross profit608 529 1,759 1,5152,374 2,129Gross margin31% 29% 31% 30% 31% 30%EBITDA177 161500 475 685 659Adjusted EBITDA185 168504 445 676 617EBITA146 132418 391 574 547Adjusted EBITA154 139422 361 566 505EBIT96 85271 252 337 318Adjusted EBIT104 91275 222 329 276Cash flow from operating activities142 175153 802 439 1,088Earnings per share before dilution (SEK) 0.06 -0.20 0.18 -0.27 0.17 -0.28See page 24 f or def inition and calculation of key ratios and Alternativ e Perf ormance Measures (APM) Nine monthsThird quarter ===== SIDA 3 ===== | COMMENTS FROM THE CEO 2 HIGH DEMAND AND IMPROVED PROFITABILITY During the third quarter of the year, we delivered a good result, where net sales increased to MSEK 1,978 (1,811) and organic growth amounted to 10.3 percent. Adjusted EBITA amounted to MSEK 154 (139), corresponding to Adjusted EBITA margin of 7.8 percent. At the consumer level, demand for our products remains high and we see a continuous influx of new distribution agreements, not least with the largest chains. We are now entering our most seasonally intensive quarter while we are fully focused on executing the initiatives that are driven within our respective business areas. Eventful quarter The third quarter was characterized by high intensity. In August, new financial targets were presented. Shortly afterwards, we held our first capital markets day with the purpose of giving the market a clearer insight into our existing operations and our strategy for continued value creation. In addition, we have completed a successful listing change to Nasdaq Stockholm's main market, which marks an important quality step in Humble's continued development. The international expansion is going according to plan with several new product launches. A diaper series in a new price segment from Naty has been launched in the USA and an international rollout of Pändy and True Co is currently taking place in several European markets. It is also pleasing that the construction of the beverage line in Habo is now completed for full-scale production. The first production series is planned for the fourth quarter and the intention is to scale the production rate towards a full shift over time. Privab has entered into a strategic cooperation agreement with Hemmakväll, a leading player in the confectionery and snack trade in Sweden with 69 stores. The collaboration begins at the turn of the year and strengthens our position as an attractive partner for distribution of snacks, drinks and confectionery. Previous efforts in Australia are now bearing fruit and we see a positive development from the factory acquisition of a bar producer and the associated launch of Body Science Soft Bars. The reception of our protein bars has exceeded expectations and the product range has quickly become the leader in the bar category in Australia. Operationally, we continue to see high demand from our customers. The response from the larger retail chains is positive and we have confirmed several new launches of products and brands for 2025. The consolidation work is progressing well and we have started a number of additional structural integrations and consolidations, with the purpose of streamlining central functions and achieving scalability in purchasing and sales. Strong cash generation and increased gross profit Organic growth increased compared to the first half of the year, where the Quality Nutrition business segment stood out with an increase of 18 percent, as a result of strong development in Sweden and Australia. The organic growth of 7 percent in Future Snacking was not satisfactory, which was negatively affected by terminated external distribution agreements in FCB of MSEK -7 and certain limitations in capacity. The brands in the segment continue to perform strongly and the work to strengthen production capacity continues, where we have a good outlook for the segment as a whole going forward. The sales increase for the group is primarily volume-driven and we see a continued slowdown in the historical price increases that dominated the market last year. The profitability developed in the right direction, with an adjusted EBITA that amounted to MSEK 154 (139), a total increase corresponding to 11 percent, and taking into account the sale of the properties, the organic increase was 14 percent. The gross margin for the quarter showed an improvement compared to previous year and increased to 31 percent (29), which contributed to an increase in gross profit of 15 percent. The improved margin is a result of our work to gradually implement central margin-improving initiatives as well as a good management of the dynamics of pricing vis-à-vis customers and purchases. The good demand and margin improvements are pleasing to see, not least in light of the volatile freight and raw materials market as well as continued uncertainty in the consumer market. The quarter delivered a strong cash flow of MSEK 142 after changes in working capital, despite an increased inventory tie-up of MSEK -47 ahead of October and November, which have historically been the highest sales months. Seasonally, we expect to be able to release additional working capital during the fourth quarter, which will have a positive effect on our cash flow. Our balance sheet continues to strengthen and we are following the previously communicated plan to reduce leverage towards our financial target of <2.5x. Outlook The fourth quarter is Humble's most important quarter in terms of sales. The quarter has had a positive start, at the same time we are facing strong comparative figures against the previous year regarding net sales. We see good opportunities to continue growing the business with strengthened profitability and at the same time ensure the best possible conditions for 2025, with the aim of continued profitability improvement, development of our platform and establishment in existing and new markets. I am convinced that our position, combined with the strategic initiatives that have begun, gives us all the conditions to continue creating value for our shareholders. Simon Petrén CEO Humble Group Stockholm, October 31st, 2024 Humble Group is a leading FMCG Group comprising 47+ entrepreneurial driven entities, with focus on health and well-being in a sustainable way ===== SIDA 4 ===== | FINANCIAL DEVELOPMENT Humble Group AB Interim Report July - September 2024 3 HUMBLE GROUP’S FINANCIAL DEVELOPMENT THIRD QUARTER REVENUES Net sales Net sales for the quarter amounted to MSEK 1,978 (1,811), an increase of 9% compared to the corresponding period last year. The change is attributable to organic growth for the wholly owned subsidiaries in both periods of 10% and currency impact was -1%. Gross margin The gross profit amount to MSEK 608 (529), resulting in a gross margin of 30,7%, an increase of 1.5 percentage point compared to the corresponding period last year. EXPENSES Other external expenses Other external expenses for the quarter amounted to MSEK -250 (-203), which corresponded to 13% (11) of net sales. Costs related to the list change amount to -5 (-2) for the period. Personnel expenses Personnel expenses for the quarter amounted to MSEK -195 (-187), which corresponded to 10% (10) of net sales. Personnel expenses were negatively impacted by consideration linked to employment (stay-on-bonus and lock-in penalties) of MSEK -6 (-11), see Note 6 Items affecting comparability. Depreciation and amortization Total depreciation and amortization for the quarter amounted to MSEK -81 (-77), which corresponded to a change of 6% compared with the corresponding period last year. Depreciation of right-of-use assets amounted to MSEK -19 (-17) for the quarter. Amortization of assets related to acquisitions, of which a vast majority related to customer relations, amounted to MSEK -38 (-37). Financial expenses Financial expenses for the period amounted to MSEK -57 (-159). During the third quarter 2023, Humble recognised costs related to the refinancing of MSEK -78. Interest expense related to unwinding of discounting effect of contingent considerations and other liabilities presented at fair value amounted to MSEK -4 (-15). Such interest expense has no cash effect in the quarterly result. For more details of the financial expenses, please refer to Note 7 Financial expenses. RESULTS EBITA EBITA for the quarter amounted to MSEK 146 (132), a change of MSEK 13 compared with the corresponding period last year. The impact of the revaluation of earn out amount to MSEK 15 (1). Adjusted EBITA amounted to MSEK 154 (139), which corresponded to a change of MSEK 15, an 11% increase for the period. For more details on adjusted items, please refer to Note 6 Items affecting comparability. EBIT EBIT for the quarter amounted to MSEK 96 (85), which corresponded to a change of MSEK 11 compared with the corresponding period last year. Adjusted EBIT amounted to MSEK 104 (91), which corresponded to a change of MSEK 13, an increase of 14% for the period. Other comprehensive income The negative translation difference of for the third quarter is attributable to the weakening of the Swedish krona against GBP. FINANCIAL POSITION AND CASH FLOW Cash flow Cash flow from operating activities amounted to MSEK 142 (175). Cash flow from operations was positively impacted by net working capital increase, mainly in short term liabilities of MSEK 75 (-26). Cash flow from financing activities amounted to MSEK -83 (-484). The Group amortized MSEK -168 during the third quarter. Financial position Interest-bearing liabilities amount to MSEK 2,006 compared with MSEK 1,819 (including loan directly associated with assets classified as held for sale) at year end 2023. Net debt including earnout/Adjusted EBITDA was 2.9x compared with 3.3x on 31 December 2023. OTHER Capitalized work on own account As the Group has develop from being a technology focused business to a broader FMCG group, as well as the industry transition into a faster product life cycle turnover, the Group has updated its assessment and judgement for the criteria regarding the application of accounting principles in regard to capitalized work on own account. The capitalised work on own account amounted to MSEK 2 (21) for the third quarter. For more information, see Note 2 Significant accounting estimates and judgements and Note 6 Items affecting comparability ===== SIDA 5 ===== | FINANCIAL DEVELOPMENT Humble Group AB Interim Report July - September 2024 4 NINE MONTHS REVENUES Net sales Net sales for the first nine months amounted to MSEK 5,678 (5,114), an increase of 11% compared to the corresponding period last year. The change is attributable organic growth for the wholly owned subsidiaries in both periods. Gross margin The gross profit amount to MSEK 1,759 (1,515), resulting in a gross margin of 31,0%, an increase of 1.4 percentage point compared to the corresponding period last year. EXPENSES Other external expenses Other external expenses for the first nine months amounted to MSEK -716 (-601), which corresponded to 13% (12) of net sales. Costs related to the list change amount to -10 (-3) for the period. Personnel expenses Personnel expenses for the first nine months amounted to MSEK -604 (-568), which corresponded to 11% (11) of net sales. Personnel expenses were negatively impacted by consideration linked to employment (stay-on-bonus and lock- in penalties) of MSEK -20 (-35), see Note 6 Items affecting comparability. Depreciation and amortization Total depreciation and amortization for the first nine months amounted to MSEK -229 (-223), which corresponded to a change of 3% compared with the corresponding period last year. Depreciation of right-of-use assets amounted to MSEK -56 (-47) for the period. Amortization of assets related to acquisitions, of which a vast majority related to customer relations, amounted to MSEK -113 (-110). Financial expenses Financial expenses for the first nine months amounted to MSEK -181 (-325). During the third quarter 2023, Humble recognised costs related to the refinancing of MSEK -78. Interest expense related to unwinding of discounting effect of contingent considerations and other liabilities presented at fair value amounted to MSEK -27 (-56). Such interest expense has no cash effect in the result for the period. For more details, please refer to Note 7 Financial expenses. RESULTS EBITA EBITA for the first nine months amounted to MSEK 418 (391), which corresponded to a change of MSEK 27 compared with the corresponding period last year. The impact of the revaluation of earn out amount to MSEK 59 (42). Adjusted EBITA amounted to MSEK 422 (361), which corresponded to a change of MSEK 61, an increase of 17% for the period. For more details, please refer to Note 6 Items affecting comparability. EBIT EBIT for the first nine months amounted to MSEK 271 (252), which corresponded to a change of MSEK 20 compared with the corresponding period last year. Adjusted EBIT amounted to MSEK 275 (222), which corresponded to a change of MSEK 53, an increase of 24% for the period. Other comprehensive income The positive translation difference for the first nine month is attributable to the weakening of the Swedish krona against GBP and EUR. FINANCIAL POSITION AND CASH FLOW Cash flow Cash flow from operating activities amounted to MSEK 153 (802). The change between the periods is mainly explained by a net working capital increase, mainly in inventory, of MSEK -246 (-17). In Q2 2023, the Group received tax deferrals of MSEK 260 which had a positive impact on the cash flow from operating activities last year. During the third quarter, Humble was granted an instalment plan of 36 months for these tax deferrals, starting in February 2025. Cash flow from financing activities amounted to MSEK -54 (-294). During the second quarter 2023, the Group completed a refinancing of the bond financing which explain the main differences between the two periods. The Group amortized MSEK -346 during the first nine months and the cash flow impact from paid contingent consideration amounted to MSEK -295. Financial position During the second quarter 2024, the Group expanded its existing credit facility agreement with a total of MSEK 300, whereas MSEK 150 is a short-term loan and MSEK 150 is an extension of the existing revolving credit facility. Interest- bearing liabilities amount to MSEK 2,006 compared with MSEK 1,819 at year end 2023. Net debt including earnout/Adjusted EBITDA was 2.9x compared with 3.3x on 31 December 2023. OTHER Capitalized work on own account As the Group has develop from being a technology focused business to a broader FMCG group, as well as the industry transition into a faster product life cycle turnover, the Group has updated its assessment and judgement for the criteria regarding the application of accounting principles in regard to capitalized work on own account. The capitalised work on own account amounted to MSEK 5 (62) for the first nine months. For more information, see Note 2 Significant accounting estimates and judgements and Note 6 Items affecting comparability ===== SIDA 6 ===== | SEGMENT INFORMATION Humble Group AB Interim Report July - September 2024 5 SEGMENT REPORT - FUTURE SNACKING SEGMENT OVERVIEW During the quarter, we have maintained focus on growth enablers for our brands and to resolve capacity constraints in the Future Snacking segment. The underlying growth was double digit but where the total growth was negatively impacted by structural changes in FCB and divestment of Bayn Production. The profitability was significantly increased by improved gross margin and maintained cost control. The brands are performing well and we have continued our work to optimize the manufacturing sites, where we have started to see some effect increased efficiency. True Dates has quickly gained a positie customer reception across multiple markets, with new flavours and listings being added. We expect continued growth, supported by investments in expanded in-house production and warehousing to meet rising demand. Pändy continues to exceed expectations, achieving strong growth in the Nordics and expanding into new markets, becoming the #1 packed confectionery in Norway. In line with our innovation strategy, Pändy's release of Cola Dummies has swiftly positioned it as a category leader in Sweden. First Class Brands noticed a weaker sales development for the quarter due to structural changes where external and unfavourable distribution contracts have been terminated. This change affected the segment's overall growth in the quarter negatively by MSEK -7 for the quarter and MSEK -35 year to date. The reason for terminating the contracts is to increase the underlying profitability of the long-term and an important step in building a foundation for our internal platform. SEGMENT UPDATE The most significant events and initiatives for the segment during the quarter comprise, among others: During the quarter, we prepared to increase capacity at Grahns and Franssons by adding shifts to selected production lines to meet growing customer demand. True Co, with its True Dates product, has secured listings in both existing and new markets, while continually expanding its range with new flavours. Pändy shows strong growth in several markets, sustaining a leading position within packed sugar- reduced candy. Lev has expanded its production facility which will add several new capabilities such as protein bars and wafers. SALES AND PROFITABILITY Net sales increased by 4% and amounted to MSEK 239 (230) for the quarter. The net sales growth in the quarter were negatively impacted by MSEK -4 from the divestment of Bayn Production AB. Adjusted EBITDA for the quarter amounted to MSEK 40 (24), with an Adjusted EBITDA margin of 17% (11). Companies included in the segment can be found in Note 31 in the Annual report 2023 and 2022. ===== SIDA 7 ===== | SEGMENT INFORMATION Humble Group AB Interim Report July - September 2024 6 SEGMENT REPORT - SUSTAINABLE CARE SEGMENT OVERVIEW During the quarter, we have made progress with several strategic advancements in our key companies for the Sustainable Care segment. The growth was in mid-single digits and the profitability slightly less, due to increased freight costs and extraordinary tough comparables to last year. Solent continues to deliver solid results with sustained growth and profitability. We continue to drive innovation in the segment with the successful U.S. launch of Naty Bamboo diapers and the "Babblarna" co-branded products. Naty remains a product quality leader in the segment, pushing boundaries for future growth. The "Babblarna" initiative has already sparked positive market interest, with secured listings for 2025 and are soon to launch new several new product lines. Humble Co. has solidified its organization and returned to profitability and growth, particularly in the U.S., where the momentum is fuelling several NPD initiatives with significant market interest. Additionally, several of our companies are expanding their focus on Private Label, and we expect further growth in this area. Overall, this quarter reflects our dedication to innovation and the ambition to continue expanding our business in key markets. SEGMENT UPDATE The most significant events and initiatives for the segment during the quarter comprise, among others: Naty has successfully launched a Bamboo based diapers in the US. The "Babblarna" initiative has been introduced, generating strong market interest and several listings secured for next year. Solent is continuing to perform with solid top-line growth and profitability margin. SALES AND PROFITABILITY Net sales increased with 6% and amounted to MSEK 647 (608) for the quarter. Adjusted EBITDA for the quarter amounted to MSEK 80 (94), with an Adjusted EBITDA margin of 12% (15). Companies included in the segment can be found in Note 31 in the Annual report 2023 and 2022. SUSTAINABLE CAREMSEK2024 2023 2024 2023Gross sales651 611 1,740 1,596Intra-group sales-5 -3 -17 -11Net sales647 608 1,723 1,585Raw material and consumables -417 -388 -1,097 -1,024Gross profit 229 220 627 561Gross margin 35% 36% 36% 35%EBITDA91 88 230 246Items affecting comparability-11 6 -4 -45Adjusted EBITDA80 94 227 202Adjusted EBITDA margin12% 15% 13% 13%EBITA86 81 216 226Adjusted EBITA75 87 212 181Adjusted EBITA margin12% 14% 12% 11%EBIT 60 53 140 146Adjusted EBIT50 59 136 102Adjusted EBIT margin8% 10% 8% 6%See page 24 f or def inition and calculation of key ratios and Alternativ e Perf ormance Measures (APM) Third quarter Nine months ===== SIDA 8 ===== | SEGMENT INFORMATION Humble Group AB Interim Report July - September 2024 7 SEGMENT REPORT - QUALITY NUTRITION SEGMENT OVERVIEW The third quarter for Quality Nutrition- segment had strong double digit-growth and with improved profitability. Following our strategic investments in brand and marketing throughout the year, Body Science is surpassing it’s growth targets, with new listings secured in Australia and launch of a successful collaboration with Chupa Chups nationwide. Bars Production continues to experience a significant demand, leading to an upscaling of production. New production lines and efficiency improvements have been implemented, with further enhancements planned to ensure long-term capacity and growth. The technical installations for the new drink line in Habo have been successfully finalized, and we are now entering the startup phase for production. This marks an important milestone as we prepare to bring the new line fully up and running. A new colonial division, Amazing Foods, has been established separately from Ewalco. The division will focus on dried fruits, nuts, and a range of snack solutions, catering to the growing demand for these products. SEGMENT UPDATE The most significant events and initiatives for the segment during the quarter comprise, among others: Body Science is surpassing growth targets, securing new listings in Australia, and launch of a collaboration with Chupa Chups products nationwide. The installation of the new drink line in Habo has been completed, with the starting of the production initiated. First customer orders expected during the fourth quarter. Now colonial division moved, which will lead to extra capacity freed up at Ewalco. SALES AND PROFITABILITY Net sales increased with 17% and amounted to MSEK 387 (332) for the quarter. Adjusted EBITDA for the quarter amounted to MSEK 42 (31), with an Adjusted EBITDA margin of 11% (9). Companies included in the segment can be found in Note 31 in the Annual report 2023 and 2022. QUALITY NUTRITIONMSEK2024 2023 2024 2023Gross sales403 341 1,195 1,058Intra-group sales-16 -9 -43 -27Net sales387 332 1,153 1,031Raw material and consumables -269 -243 -798 -752Gross profit 118 89 355 279Gross margin 30% 27% 31% 27%EBITDA39 33 112 131Items affecting comparability3 -3 -5 -27Adjusted EBITDA42 31 107 104Adjusted EBITDA margin11% 9% 9% 10%EBITA32 27 93 114Adjusted EBITA35 25 88 87Adjusted EBITA margin9% 7% 8% 8%EBIT 25 21 72 93Adjusted EBIT28 18 67 66Adjusted EBIT margin7% 5% 6% 6%See page 24 f or def inition and calculation of key ratios and Alternativ e Perf ormance Measures (APM) Third quarter Nine months ===== SIDA 9 ===== | SEGMENT INFORMATION Humble Group AB Interim Report July - September 2024 8 SEGMENT REPORT - NORDIC DISTRIBUTION SEGMENT OVERVIEW Nordic Distribution has seen a positive development during the third quarter, with double-digit growth and improved margins. By optimizing our warehouse and distribution operations, we have enhanced our strategic capabilities and also secured a long-term contract with Hemmakväll, a Swedish snacks and confectionery retailer with 69 stores. The consolidation of individual Privab entities have continued to realize supply chain synergies. In addition, this will enable cost efficient improvements of the digital offering. While this integration has affected short-term profitability, it is expected to enhance long-term operational efficiency. GSD have successfully launched new products, among others Hell Ice Coffee and Hell Energy which are performing well in the market. SEGMENT UPDATE The most significant events and initiatives for the segment during the quarter comprise, among others: Privab has signed a strategic partnership with Hemmakväll to supply candy and snacks to their 69 stores starting Jan 1st, 2025. GSD launched new products Selected by Josefine Quist which has been received well. Vitalkost continue with a successful core offering and has launched TrueDates which has performed above our expectations. SALES AND PROFITABILITY Net sales increased with 10% and amounted to MSEK 705 (640) for the quarter. Adjusted EBITDA for the quarter amounted to MSEK 39 (31), with an Adjusted EBITDA margin of 6% (5). Companies included in the segment can be found in Note 31 in the Annual report 2023 and 2022. NORDIC DISTRIBUTIONMSEK2024 2023 2024 2023Gross sales713 650 2,101 1,826Intra-group sales-8 -10 -25 -31Net sales705 640 2,076 1,795Raw material and consumables -554 -513 -1,625 -1,418Gross profit 151 128 451 377Gross margin 21% 20% 22% 21%EBITDA38 29 90 78Items affecting comparability1 1 8 10Adjusted EBITDA39 31 98 88Adjusted EBITDA margin6% 5% 5% 5%EBITA31 22 70 59Adjusted EBITA32 23 78 69Adjusted EBITA margin5% 4% 4% 4%EBIT 24 17 51 44Adjusted EBIT25 18 60 54Adjusted EBIT margin4% 3% 3% 3%See page 24 f or def inition and calculation of key ratios and Alternativ e Perf ormance Measures (APM) Third quarter Nine months ===== SIDA 10 ===== | OTHER INFORMATION Humble Group AB Interim Report July - September 2024 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. In August 2024, Humble Group presented new financial targets. The medium-term financial targets: Growth target – Average net sales growth of at least 15 percent per year, primarily driven by organic growth. Profitability target – EBIT margin of at least 10 percent. Capital structure – Net debt in relation to EBITDA must not exceed 2.5x. However, the company may, under special circumstances, choose to exceed this level for shorter periods in connection with acquisitions. Humble’s dividend policy is that the surplus must be distributed to shareholders when free cash flow exceeds available investments in profitable growth. Dividends to shareholders require that the capital structure target is met. Read more about the Group and its composition on www.humblegroup.se STAFF AND NUMBER OF EMPLOYEES On Group level The average number of employees in the Group for the period was 1,139 (1,102). The proportion of women in the Group for the full year was 44% (47). Parent company The average number of employees in the Parent Company during the period was 19 (18), with 26% (21) being women. RISKS AND UNCERTAINTIES Humble Group works continuously to identify, evaluate, and manage risks and exposures that the Group subsidiaries face. The Group's financial position and earnings are affected by various risk factors that must be considered when assessing the Group and its future earnings. A description of significant risks and uncertainties can be found in the Annual Report for 2023. At the time of this interim report being published the war between Russia and Ukraine, as well as the renewed flare-up of the long-standing war in Israel and Gaza is still ongoing. Humble Group does not have any exposures towards these countries, and as such do not note any direct effects from the ongoing wars. Even though it is difficult to quantify the exact effects, the Group notices the indirect effects from the wars driven by a volatile macro environment with a change in consumer consumption patterns. The Group monitors the market development closely to ensure that Humble positions its product mix in best possible way to meet any potential changes in market or consumer behaviour. Furthermore, the increased market price volatility regarding raw material prices as well as development of the freight crisis is monitored closely to enable transition of price increases to customers in all material aspects and to a protect stable operating margins. PARENT COMPANY Humble Group AB divest all shares in Bayn Production AB in January 2024, for a total purchase price of MSEK 7.7. The financial effect is considered not material for the Group. Humble Group AB created the joint company Humble Hatten AB (Stockholm) with the creators of “Babblarna”, one of the strongest brands for children in Sweden. Humble Hatten AB will launch products within various categories under the brand “Babblarna”. The Parent company holds 77.6% of the share and votes of the company through its subsidiary Humble Incubator AB, and Hatten Education AB holds the remaining 22.4% shares and votes. No other significant events occurred in Humble Group AB during the third quarter. RELATED PARTY TRANSACTION No transactions with related parties have occurred during 2024 that had a significant impact. The minor transactions that have occurred relate to lease agreements regarding 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 year-end report for the period October-December 2024 will be published on February 19th, 2024. The Annual and Sustainability report 2024 will be published on April 9th, 2025. The Annual General meeting with be held on May 21st 2025. For financial reports and calendar, see more detailed information on our website www.humblegroup.se AUDITORS BDO Auditor in Charge: Carl-Johan Kjellman, Authorised Public Accountant Email: carl-johan.kjellman@bdo.se ===== SIDA 11 ===== | THE SHARE Humble Group AB Interim Report July - September 2024 10 THE SHARE THE SHARE The Group’s share with ticker HUMBLE is listed on Nasdaq Stockholm main market since 27th of September 2024. The share was previously traded on Nasdaq First North Growth Market since 12th of November 2014. NUMBER OF SHARES At the end of the reporting period, the total number of shares at full dilution amounts to 446,575,533 (443,544,543), which entitles to one vote each. All shares are of the same share class. The number of outstanding warrants amounted to 12,500,000 (7,420,000). For the period July - September 2024, the average number of shares before dilution and average number of shares after dilution amounted to 446,575,533 and 459,708,651 respectively. TRADE IN THE SHARE Third quarter The total liquidity in the share during the quarter amounted to MSEK 634 (502). The number of transactions for the same period amounted to 38,266 (46,289). The average volume per transaction amounted to SEK 16,579 (10,845). The average volume per trading day amounted to MSEK 10 (8). LARGEST SHAREHOLDERS The ten largest shareholders per September 30th, 2024, are listed below: DATA PER SHARE An overview of share development, turnover and result per share is presented below. Owner Shares VotesNeudi & C:o AB 46,435,778 10.40%Håkan Roos (RoosGruppen AB) 46,134,786 10.33%Noel Abdayem (NCPA Capital AB) 28,000,674 6.27%Capital Group 27,238,715 6.10%Alta Fox Capital 26,021,235 5.83%Creades AB 18,136,470 4.06%Nordnet Pensionsförsäkring 14,447,272 3.24%DNB Asset Management SA 14,066,668 3.15%Thomas Petrén (Seved Invest AB) 12,570,000 2.81%DNB Asset Management AS 12,896,095 2.89%Total top 10245,947,693 55.07%Other shareholders 200,627,840 44.93%Total number of shares446,575,533 100%Full year2024 2023 2024 2023 2023Low price (SEK) 8.58 5.94 8.58 5.94 5.94High price (SEK) 13.70 9.80 13.70 11.45 11.69Closing price previous period (SEK) 10.05 6.55 11.38 9.77 9.77Closing price current period (SEK) 12.80 9.10 12.80 9.10 11.38Share price development during period (%) 27% 39% 12% -7% 16%Trading volume in the share (MSEK) 634 502 1,285 1,409 1,748Number of transactions in the share 38,266 46,289 106,597 145,829 181,662Average volume per trading day (MSEK) 10 8 7 7 7Average volume per transaction (SEK) 16,579 10,845 12,056 9,662 9,621Number of shareholders* 18,436 22,411 18,436 22,411 20,670Number of shares outstanding* 446,575,533 443,544,543 446,575,533 443,544,543 443,544,543Average number of shares before dilution 446,575,533 443,259,358 444,627,821 355,056,976 377,360,692Average number of shares after dilution 459,708,651 450,679,358 454,854,030 360,389,431 383,219,322Net sales per share (SEK)** 4.43 4.09 12.77 14.40 18.68Adjusted EBITDA per share (SEK)** 0.41 0.38 1.13 1.25 1.75Adjusted EBITA per share (SEK)** 0.34 0.31 0.95 1.02 1.34Adjusted EBIT per share (SEK)** 0.23 0.21 0.62 0.62 0.73EBIT per share (SEK)** 0.21 0.19 0.61 0.71 0.84Earnings per share after dilution (SEK) 0.06 -0.20 0.18 -0.27 -0.28 See page 24 f or def inition and calculation of key ratios and Alternativ e Perf ormance Measures (APM) *End of period, **Bef ore dilution Third quarter Nine months ===== SIDA 12 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 11 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Last Twelve MonthsFull yearMSEK Note2024 2023 2024 2023Oct 2023 - Sep 20242023Net sales41,978 1,811 5,678 5,114 7,614 7,050Capitalized work on own account 2 21 5 62 27 83Other operating income 5 23 29 103 178 186 262Raw materials and consumables-1,370 -1,282 -3,918 -3,599-5,240 -4,921Other external expenses-250 -203 -716 -601-966 -851Personnel expenses-195 -187 -604 -568-826 -790Other operating expenses 5-11 -27 -47 -111-111 -174EBITDA6177 161 500 475 685 659Depreciation of tangible fixed assets -12 -12 -26 -36 -37 -47Depreciation of right-of-use assets -19 -17 -56 -47 -73 -64EBITA6146 132 418 391 574 547Amortization of intangible fixed assets -12 -11 -34 -30 -88 -83Amortization of assets related to acquisitions -38 -37 -113 -110 -149 -146EBIT696 85 271 252 337 318Profit from shares in associated companies and joint ventures0 1 0 0 1 1Financial income 2 0 20 7 26 13Financial expenses7-57 -159 -181 -325 -248 -393 PROFIT AND LOSS AFTER FINANCIAL ITEMS 41 -74 110 -67 116 -61Income tax-14 -17 -29 -28 -45 -45PROFIT AND LOSS AFTER TAX 27 -91 82 -95 71 -106Profit and loss is attributable to:Owners of the Parent Company27 -91 82 -95 71 -106Non-controlling interest0 0 0 0 0 027 -91 82 -95 71 -106Other comprehensive incomeItems that may be reclassified to profit or loss:Exchange differences in translation of foreign operations-2 -98 129 130 5 6COMPREHENSIVE INCOME FOR PERIOD 25 -189 211 35 76 -100The comprehensive income for the period is attributable to:Owners of the Parent Company25 -189 211 35 76 -100Non-controlling interest0 0 0 0 0 025 -189 211 35 76 -100Earnings per share before dilution 0.06 -0.20 0.18 -0.27 0.17 -0.28Earnings per share after dilution 0.06 -0.20 0.18 -0.27 0.17 -0.28 Third quarter Nine months ===== SIDA 13 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 12 GROUP BALANCE SHEET - IN SUMMARY December, 31 MSEK Note 2024 2023 2023 ASSETS Non-currenct assets Intangible assets 5,999 6,136 6,013 Tangible fixed assets 185 185 191 Financial assets 75 70 99 Right-of-use assets 379 173 299 Deferred tax assets 30 27 29 Total non-current assets 6,668 6,592 6,631 Current assets Inventory* 1,190 999 940 Accounts receivables 604 580 561 Other short-term receivables* 312 259 254 Cash and cash equivalents 262 397 401 2,369 2,235 2,157 Assets classified as held for sale 5 0 216 129 Total current assets 2,369 2,451 2,287 TOTAL ASSETS 9,037 9,042 8,918 EQUITY AND LIABILITIES Equity Attributable to Parent Company's shareholder 5,110 5,000 4,869 Non-controlling interest 0 0 0 Total shareholders' equity 5,110 5,000 4,869 Long-term liabilities Interest-bearing liabilities 8 1,128 1,259 1,197 Contingent considerations 10 15 168 165 Long-term lease liabilities 332 123 258 Deferred tax liabilities 448 501 474 Provisions 9 33 17 Other long-term liabilities** 180 15 18 Total long-term liabilities 2,112 2,099 2,129 Short-term liabilities Interest-bearing liabilities 8 472 416 253 Contingent considerations 10 131 332 336 Current lease liabilities 74 55 67 Accounts payable 736 629 652 Other short-term liabilities** 403 512 568 1,815 1,944 1,876 Liabilities directly associated with assets classified as held for sale 5 0 0 43 Total short-term liabilities 1,815 1,944 1,919 TOTAL EQUITY AND LIABILITIES 9,037 9,042 8,918 September, 30 *Adv ances to suppliers has been reclassif ied f rom inv entory to other short-term receiv ables. The adjustment amount to MSEK 52 f or September 2023 and MSEK 43 f or December 2023. **During the third quarter, the Group hav e been granted installment plans f or its tax def errals of MSEK 252, which will be paid during coming three y ears. As such, MSEK 168 hav e been reclassif ied f rom Other short term liabilities to Other long term liabilities in the third quarter 2024. ===== SIDA 14 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 13 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – THIRD QUARTER MSEKShare capitalOther equity contributedTranslation reserveRetained earningsTotalNon-controlling interestTotal shareholders equityOpening balance July 1, 2023 97 5,011 405 -341 5,171 0 5,171Net income for period -91 -91-91Other comprehensive income -98 -98 -98Total comprehensive income-98 -91 -189 -189Transaction with owners in their capacity as owners:Share issue1 181818Transaction costs-1-1-1Realisation loss from share buyback0 00Warrants program 1 1 1Total transaction with owners in their capacity as owners1 18 18 18Ending balance September 30, 2023 98 5,028 307 -432 5,000 0 5,000Opening balance July 1, 2024 98 5,057 314 -384 5,085 0 5,085Net income for period27 27 0 27Other comprehensive income-2-2 -2Total comprehensive income-2 27 25 0 25Transaction with owners in their capacity as owners:Share issue0 0 0Warrants program 1 1 1Aquistion of non-controlling interest 0Total transaction with owners in their capacity as owners0 1 0 0 1 0 1Ending balance September 30, 2024 98 5,057 312 -357 5,110 0 5,110 Equity attributable to Parent Company's shareholder ===== SIDA 15 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – NINE MONTHS MSEKShare capitalOther equity contributedTranslation reserveRetained earningsTotalNon-controlling interestTotal shareholders equityOpening balance January 1, 2023 66 4,131 177 -338 4,036 0 4,036Net income for period-95 -95 -95Other comprehensive income 130 130 130Total comprehensive income130 -95 35 35Transaction with owners in their capacity as owners:Share issue31 927 958 958Transaction costs-28 -28 -28Realisation loss from share buyback-1-1-1Warrants program -1-1-1Total transaction with owners in their capacity as owners31 897 0 0 928 928Ending balance September 30, 2023 98 5,028 307 -432 5,000 0 5,000Opening balance January 1, 2024 98 5,028 183 -439 4,869 0 4,869Net income for period 82 82 0 81Other comprehensive income 129 129 129Total comprehensive income129 82 211 0 211Transaction with owners in their capacity as owners:Share issue1 29 29 29Transaction costs0 0Warrants program 1 1 1Aquistion of non-controlling interest 0Total transaction with owners in their capacity as owners1 29 0 0 30 0 30Ending balance September 30, 2024 98 5,057 312 -357 5,110 0 5,110 Equity attributable to Parent Company's shareholder ===== SIDA 16 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 15 GROUP CASH-FLOW STATEMENT During Q2 2023, tax deferments of total MSEK 260 was recognised as short term liabilities and had a positive impact on the cash flow for the period. The Group got the 36 months instalment plan approved for the tax deferral, starting payment in February 2025. Last Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023OPERATING ACTIVITIESProfit and loss after financial items 41 -74 110 -67 116 -61Adjustment for non-cash items Depreciation and Amortization 81 77 229 223 347 341Other items 30 159 115 266 153 304Paid tax -32 -7 -70 -21 -104 -54Cash flow from operating activities before change in net working capital119 154 384 400 514 529CHANGE IN WORKING CAPITALChange in inventories (increase - / decrease + ) -47 18 -246 -17 -202 27Change in short term receivables (increase - / decrease + ) -6 29 -64 168 -42 190Change in short term liabilities (increase - / decrease + ) 75 -26 79 251 169 341Sum of change in working capital 22 20 -231 402 -75 558Cash flow from operating activities 142 175 153 802 439 1,088INVESTING ACTIVITIESAcquisition of intangible assets-14 -28 -22 -69 -65 -112Acquisition of tangible assets-22 -16 -80 -39 -90 -49Disposal of financial assets22 0 53 0 53 0Disposal of subsidaries*0 0 115 0 222 107Acquisition of subsidiaries, acquired business + paid earn-outs*0 -116 -308 -352 -326 -369Cash flow from investing activities -14 -160 -242 -460 -205 -423FINANCING ACTIVITIESShare issue funds 0 0 0 875 0 875Costs related to share and bond issues, and refinancing 0 -81 -4 -107 -8 -111Bond financing 0 -1,800 0 -1,800 0 -1,800Paid interest due to financing activities -42 -79 -109 -187 -138 -216New loans 149 1,459 462 1546 462 1,546Repayment of loans -168 43 -346 -567 -602 -823Amortization of lease liability -22 -26 -57 -54 -75 -72Cash flow from financing activities -83 -484 -54 -294 -361 -601Decrease/Increase in cash and cash equivalents 45 -470 -144 49 -128 64Cash and cash equivalents at beginning of period 218 864 401 338 397 338Exchange rate differences -1 35101-1Cash and cash equivalents at end of period 262 397 262 397 270 401Deployable cashflow** 64 26 53 454 86 486 Third quarter Nine months *An amount of MSEK 109 related to the sale of properties in Q2 2024 has been reclassed between Disposal of subsidiaries and Acquisition of subsidaries f or the period showing nine months. **See page 24 f or def inition and calculation of key ratios and Alternativ e Perf ormance Measures (APM) ===== SIDA 17 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 16 INCOME STATEMENT - PARENT COMPANY Last Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023Net sales10631194844Other operating income0115 0 1Total revenue 10 7 31 24 49 46Other external expenses -14 -7-31-20 -36 -29Personnel expenses-11-9-32-30 -45 -43Other operating expenses0-3-40 1 -1Depreciation and amortization of fixed tangible and intangible assets0000 0 0OPERATING PROFIT (EBIT) -15 -12 -36 -27 -31 -28Profit from shares in Group companies0 0 159 13 106 106Interest income4 7 33 24 31 34Interest expenses-36 -141 -134 -298 -250 -355PROFIT AND LOSS AFTER FINANCIAL ITEMS -47 -146 23 -287 -145 -243Year-end appropriations 0000 96 96PROFIT AND LOSS BEFORE TAX -47 -146 23 -287 -48 -147Current taxes0000 -5 -5PROFIT AND LOSS AFTER TAX -47 -146 23 -287 -54 -152 Third quarter Nine months In the parent company , there are no items that are reported as other comprehensiv e income, which is why total comprehensiv e income corresponds to the y ear's result. ===== SIDA 18 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 17 PARENT COMPANY BALANCE SHEET – IN SUMMARY December, 31MSEK2024 2023 2023ASSETSNon-current assetsIntangible fixed assets5 12Tangible fixed assets3 13Financial fixed assets6,890 6,9816,967Total non-current assets 6,898 6,983 6,972Current assetsAccounts receivables0 02Receivables with group companies218153 269Other short-term receivables5521 24Cash and cash equivalents21 4Total current assets 275 175 298TOTAL ASSETS 7,172 7,158 7,269EQUITY AND LIABILITIESEquityRestricted equity9898 98Unrestricted equity4,6894,489 4,637Total shareholders equity 4,7874,587 4,735Provisions146 507 507Long term liabilitiesInterest-bearing liabilities1,122 1,3441,189Liabilities to group companies9 015Other long-term liabilities0 1111Total long-term liabilities 1,131 1,355 1,215Short-term liabilitiesInterest-bearing liabilities472248 253Accounts payable135 12Liabilities to group companies589428 506Other liabilities3429 41Total short-term liabilities 1,108 710 812TOTAL EQUITY AND LIABILITIES 7,172 7,158 7,269 September, 30 ===== SIDA 19 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 18 NOTES 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 applicable regulations in the Swedish Annual Accounts Act. The interim report for the parent company is prepared in accordance with ÅRL chapter 9. 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. Information according to IAS 34.16A appears in addition to the financial reports and associated notes also in other parts of the interim report. The accounting policies adopted are consistent with those of the Annual report for the year ended December 31, 2023. New or amended IFRS standards, effective from January 1, 2024, 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 4 in the Annual report 2023. The management has made assessments and estimates continuously throughout 2024, where the main estimates relate to contingent considerations. See Note 5 and Note 10 for more information. As the Group has developed from being a technology focused business to a broader FMCG group, as well as the industry transition into a faster product life cycle turnover, the Group have updated its assessment and judgement for the criteria regarding the application of accounting principles in regard to capitalized work on own account. This implies a significant change going forward of capitalized work on own account from Q1, 2024. To achieve a relevant comparison with previous period and to reflect the updated assessment of accounting principles, capitalized work on own account have been adjusted in items affecting comparability for the comparative period. See Note 6 for more information. On April 17th, the Group completed the second part of the real estate sale, as a sale and leaseback transaction. The right-of-use asset is measured at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the Group. Quantitative information is presented in Note 5. NOTE 3 – SUBSEQUENT EVENTS There have been no significant events with effect on the financial reporting after the reporting period date. ===== SIDA 20 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 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 adjusted earnings before interest, tax, depreciation, and amortization (Adjusted 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. See page 24 for definition and calculation of key ratios and Alternative Performance Measures (APM). The Group financials consist of below combined segments: Third quarter, MSEK2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023Gross sales 267 249 651 611 403 341 713 650 0 02,035 1,852Intra-group sales -28 -18 -5 -3 -16 -9 -8 -10 0 0-57 -41Net sales 239 230 647 608 387 332 705 640 1,978 1,811Raw material and consumables -130 -138 -417 -388 -269 -243 -554 -513-1,370 -1,282Gross profit 110 92 229 220 118 89 151 128 608 529Gross margin, % 46% 40% 35% 36% 30% 27% 21% 20% 31% 29%EBITDA 35 29 91 88 39 33 38 29 -26 -18 177 161Items affecting comparability** 5 -5 -11 6 3 -3 1 1 9 78 7Adjusted EBITDA*** 40 24 80 94 42 31 39 31 -17 -11 185 168Adjusted EBITDA margin 17% 11% 12% 15% 11% 9% 6% 5% 9% 9%EBITA 26 20 86 81 32 27 31 22 -28 -19 146 132Adjusted EBITA 31 16 75 87 35 25 32 23 -19 -12 154 139Adjusted EBITA margin 13% 7% 12% 14% 9% 7% 5% 4% 8% 8%EBIT 16 13 60 53 25 21 24 17 -28 -19 96 85Adjusted EBIT 21 8 50 59 28 18 25 18 -19 -12 104 91Adjusted EBIT margin 9% 3% 8% 10% 7% 5% 4% 3% 5% 5%*Other ref ers to Parent company and minor administrativ e entities, **See Note 5, ***See Note 6 f or reconciliation to Prof it bef ore tax Future Snacking Sustainable Care Quality Nutrition Nordic Distribution Other* Total Nine months, MSEK2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023Gross sales 809 764 1,740 1,596 1,195 1,058 2,101 1,826 20 135,865 5,257Intra-group sales -83 -61 -17 -11 -43 -27 -25 -31 -20 -13-188 -144Net sales 726 703 1,723 1,585 1,153 1,031 2,076 1,795 0 0 5,678 5,114Raw material and consumables -398 -405 -1,097 -1,024 -798 -752 -1,625 -1,418-3,918 -3,599Gross profit 328 298 627 561 355 279 451 377 1,759 1,515Gross margin, % 45% 42% 36% 35% 31% 27% 22% 21% 31% 30%EBITDA 113 53 230 246 112 131 90 78 -46 -33 500 475Items affecting comparability** -15 21 -4 -45 -5 -27 8 10 20 104 -30Adjusted EBITDA*** 98 74 227 202 107 104 98 88 -26 -23 504 445Adjusted EBITDA margin 14% 11% 13% 13% 9% 10% 5% 5% 9% 9%EBITA 88 27 216 226 93 114 70 59 -48 -35 418 391Adjusted EBITA 72 48 212 181 88 87 78 69 -28 -25 422 361Adjusted EBITA margin 10% 7% 12% 11% 8% 8% 4% 4% 7% 7%EBIT 56 4 140 146 72 93 51 44 -48 -35 271 252Adjusted EBIT 40 26 136 102 67 66 60 54 -28 -25 275 222Adjusted EBIT margin 6% 4% 8% 6% 6% 6% 3% 3% 5% 4%*Other ref ers to Parent company and minor administrativ e entities, **See Note 5, ***See Note 6 f or reconciliation to Prof it bef ore tax Future Snacking Sustainable Care Quality Nutrition Nordic Distribution Other* Total ===== SIDA 21 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 20 NOTE 5 – OTHER OPERATING INCOME AND EXPENSE On April 17th, Humble Group completed the second and last part of the sale of properties, which is structured as a sale and leaseback transaction. The right-of-use assets from the sale amount to MSEK 72 and the leasing liability amount to MSEK 73. The new right-of-use assets are intended to be utilized over periods of 5 and 10 years, respectively. The profit for the Group of the sale and leaseback transaction is reported as other operating income and amount to MSEK 5 and refers to the rights transferred to the buyer. The management makes updated estimates each quarter for the contingent considerations. 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 is being calculated based on an interest rate corresponding to the remaining term until payment at each reporting date. The fair value changes are reported through the profit and loss via operating income and operating expense. During the first nine months, the positive change, reported as operating income, amounted to MSEK 77 (141), and the negative change, reported as operating expense, amounted to MSEK -18 (-99). NOTE 6 – ITEMS AFFECTING COMPARABILITY Humble Group recognizes 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 11 in the Annual report 2023. The main adjustment item during the quarter was related to revaluation of contingent considerations of MSEK 15 (1). As the Group has developed from being a technology focused business to a broader FMCG group, as well as the industry transition into a faster product life cycle turnover, the Group have updated its assessment and judgement for the criteria regarding the application of accounting principles in regard to capitalized work on own account. This implies a significant change going forward of capitalized work on own account from Q1, 2024. To achieve a relevant comparison with previous period and to reflect the updated assessment of accounting principles, capitalized work on own account have been adjusted in items affecting comparability for the comparative period. Net sales per countryLast Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023Australia 14394364257530423China7147145129208193Denmark191872609280Finland312610081127108Germany5865195213253272Norway9171244201307264Portugal5243163125205167Sweden9098822,7212,5493,6683,496United Kingdom3423181,0128701,3081,166USA413510297131126Other countries*220212560531784755Total net sales 1,978 1,811 5,678 5,114 7,614 7,050*None of the other countries independently contribute more than one percent of total net sales. Third quarter Nine months ===== SIDA 22 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 21 NOTE 7 – FINANCIAL EXPENSES Last Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023Adjusted EBITDA185168504445676617Acqusition and divestment related cost and income0 -1 -6 -6-9-8Revaluation of contingent considerations accounting* 15 1 59 426851Lock-in penalty from acquisition SPA*-6-11-20-35-30-45Restructuring -6 0 -20 -15-28-23Capitalized development costs* 0 20 0 592079Other -11 -15 -16 -15-13-12EBITDA 177 161 500 474685659Depreciation -31 -29 -82 -84-110-112EBITA 146 132 418 391574547Amortization -50 -48 -147 -139-237-229EBIT 96 85 271 252337318Finance net -55 -158 -161 -319-221-379EBT 41 -74 110 -67 116 -61*These items hav e no cash f low impact. Third quarter Nine months Last Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023EBITDA177 161 500 475 685 659Items affecting comparability8 7 4 -30-8 -42Adjusted EBITDA 185 168 504 445 676 617EBITA146 132 418 391 574 547Items affecting comparability8 7 4 -30 -8 -42Adjusted EBITA 154 139 422 361 566 505EBIT96 85 271 252 337 318Items affecting comparability8 7 4 -30-8 -42Adjusted EBIT 104 91 275 222 329 276 Third quarter Nine months Last Twelve MonthsFull yearMSEK2024 2023 2024 2023Oct 2023 - Sep 20242023Interest expense related to financing-38-55-111-175-147-211Unwinding of discounting effect-4-15-27-56-31-60Interest expense on lease liabilities-6-2-17-7-20-10Exchange rate losses and revaluation effects-6-5-13-2-22-11Costs related to refinancing of bond0-780-780-78Other interest expenses-4-4-13-8-28-23Financial expenses-57-159-181-325-248-393Third quarter Nine months ===== SIDA 23 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 22 NOTE 8 – NET INTEREST-BEARING DEBT Humble Group's net interest-bearing debt as of September 30th, 2024, is presented in table below. During the second quarter 2024, Humble Group has expanded its existing credit facility agreement with a total of MSEK 300, whereas MSEK 150 is a short-term loan and MSEK 150 is an extension of the existing revolving credit facility. The existing credit facility agreement include terms and conditions implying that the Net Interest Bearing Debt in relation to LTM Adjusted EBITDA Proforma excluding leasing must not exceed 3,25x and that the LTM Adjusted EBITDA in relation to Net Financial Expenses (as defined in the credit facility agreement) shall not be less than 4,00x at the end of this period. These terms and conditions have been met since the credit facility agreement was entered in the second quarter 2023. Humble Group received tax deferments of MSEK 260 during the second quarter 2023. In accordance with IFRS Accounting principles, this was recognized as other short-term liability. The Group got the 36 months instalment plan approved for the tax deferral, starting payment in February 2025, whereupon it has been reclassified as other short-term liability and other long-term liability. Table above illustrates the leverage multiple adjusted for inclusion of earnout considerations and tax deferral. LTM Adjusted EBITDA Proforma amounted to MSEK 592 (530) excluding leasing and divested operations. Adjusted NIBD including Earnout in relation to LTM Adjusted EBITDA Proforma amounts to 2.9x (3.8x) at the end of this reporting period. NOTE 9 – BUSINESS COMBINATIONS No acquisition has been made during 2024. During first quarter of 2023, the Parent Company acquired 100% of four subsidiaries. Please see the Annual and Sustainability report 2023 for more information on the acquisition of 2023. December, 31MSEK2024 2023 2023Liability to credit institutions* 1,600 1,675 1,494Lease liabilities 407 178 325Total interest-bearing liabilities2,0061,8531,819Cash and cash equivalents -262 -397 -401Net Interest Bearing Debt (NIBD)1,7441,4571,417Tax deferral252 260 260Short-term investment to be divested0 0 -27Lease liabilities -407 -178 -325Adjusted Net Interest Bearing Debt 1,590 1,539 1,326Earnout present value146 500 501Adjusted Net Interest Bearing Debt incl earnout1,7362,0391,826LTM Adjusted EBITDA Proforma excluding leasing592 530 559Leverage to Adjusted NIBD2.7x 2.9x 2.4xLeverage to Adjusted NIBD incl earnout2.9x 3.8x 3.3x*Decem ber 2023 includes the MSEK 43 liabilities directly associated with assets classified as held for sale. September, 30 ===== SIDA 24 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report July - September 2024 23 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. For financial assets and liabilities other than those disclosed below, fair value is deemed to approximate the carrying value. There have been no transfers between fair value hierarchy levels during the reporting period. FAIR VALUE DISCLOSURE OF LONG TERM LOANS During the third quarter of 2023, Humble Group refinanced its bond obligations of MSEK 1,800 in total, and replaced this with two term loans of total MSEK 1,350 and one revolving credit facility of total MSEK 300. Humble Group expanded its existing credit facility agreement during the second quarter of 2024 with a total of MSEK 300, whereas MSEK 150 is a short-term loan and MSEK 150 is an extension of the existing revolving credit facility. There have been no changes to pledged assets related to the extended credit facility. The new term loans are measured at amortized cost that corresponds in all essential to its fair value in the balance sheet. 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 recognized at fair value and have been discounted with 9.6% 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 the first nine months, interest expense of MSEK -27 (-48) was recognized as financial expenses related to unwinding of discount effect of contingent considerations. Estimated payments per yearNominal value Fair value20240 02025137 131202617 15Total contingent considerations 154 146 December, 31Contingent consideration, MSEK2024 2023 2023Opening balance 501 780780New acquisitions 0 32 32Payments -323 -318 -320Fair value changes that are reported through profit and loss via operating income -77 -141 -199Fair value changes that are reported through profit and loss via operating expense 18 99 147Interest expenses related to unwinding of discounting effect 27 48 60Translation differences 0 2 -2Closing balance 146 500 501 September, 30 ===== SIDA 25 ===== | DEFINITIONS AND CALCULATIONS ON KEY RATIO Humble Group AB Interim Report July - September 2024 24 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 Group management considers to be relevant to users of the financial report as a supplement for the measures of the business's development. These financial measurements are not always comparable with the measures used by other companies since not all companies calculate such financial measures in the same way. Accordingly, these financial measures are not to be regarded as a replacement for measures defined according to IFRS. The calculations relate to period January - September 2024. Gross Profit Net sales less raw materials and consumables. Gross Profit is calculated as 5,678 – 3,918= MSEK 1,759. Gross Margin Gross Profit in relation to net sales. Gross Margin is calculated as 1,759 / 5,678 = 31%. EBITDA Earnings before interest, tax, depreciation, amortization, write- down and depreciation and amortization on acquisition-related surplus values. Adjusted EBITDA Earnings before interest, tax, depreciation, amortization, write- down, and amortization on acquisition-related surplus values, adjusted for items affecting comparability. Adjusted EBITDA margin is Adjusted EBITDA in relation to net sales. Adjusted EBITDA per share is Adjusted EBITDA divided by average number of shares before dilution. Adjusted EBITDA is one of the Group’s most important financial figures, internally and externally. The figure is used to identify and analyse the Group’s profitability linked to normal operations and operating activities. Adjusted EBITDA is calculated as 500 + 4 = MSEK 504. Adjusted EBITDA margin is calculated as 504 / 5,678 = 9%. Adjusted EBITDA per share is calculated as MSEK 504 / 444,627,821 = SEK 1.13. EBITA Earnings before interest, tax, amortization, write-down, and amortization on acquisition-related surplus values. EBITA- margin is EBITA in relation to net sales. Adjusted EBITA Earnings before interest, tax, amortization, write-down, and amortization on acquisition-related surplus values, adjusted for items affecting comparability. Adjusted EBITA margin is Adjusted EBITA in relation to net sales. Adjusted EBITA per share is Adjusted EBITA divided by average number of shares before dilution. Adjusted EBITA is calculated as 418 + 4 = MSEK 422. Adjusted EBITA margin is calculated as 422 / 5,678 = 7% Adjusted EBITA per share is calculated as MSEK 422 / 444,627,821 = SEK 0.95. Adjusted EBIT Earnings before interest and tax, adjusted for items affecting comparability. Adjusted EBIT margin is Adjusted EBIT in relation to net sales. Adjusted EBIT per share is Adjusted EBIT divided by average number of shares before dilution. Adjusted EBIT is calculated as 271 + 4 = MSEK 275. Adjusted EBIT margin is calculated as 275 / 5,678 = 5% Adjusted EBIT per share is calculated as MSEK 275 / 444,627,821 =SEK 0.62. Net interest-bearing debt Total interest-bearing liabilities and lease liabilities, less cash and cash equivalents. Net interest-bearing liabilities are the Group’s primary management parameter for financing and capital allocation and are actively employed as part of the group’s financial risk management strategy. Net interest-bearing debt is calculated as 1,600 + 407 - 262 = MSEK 1,744. Adjusted NIBD is calculated as 1,744 + 252 - 407 =MSEK 1,590 Adjusted NIBD including earnout is calculated as 1,590 + 146 =MSEK 1,736 Organic growth in net sales Change in net sales adjusted for exchange rate effect and net sales from acquired and divested subsidiaries during the period. Organic growth in net sales is calculated as (565 – 14) / 5,114 = 11%. Deployable cash flow The amount of cash remaining from operating activities after deduction of cash flow from investing activities, plus acquisition of subsidiaries (net cash effect), less paid interest, less amortization of lease liability, less tax deferrals. Deployable cash flow is calculated as 153 – 242 +308 - 109 -57 = MSEK 53. Last twelve months Adjusted EBITDA proforma Adjusted EBITDA proforma present the accumulated EBITDA before intra group eliminations in all entities in the group where an agreement of acquisition or divestment have been entered at the date of this report, adjusted for items affecting comparability. LTM Adjusted EBITDA proforma is an important key figure for the group, as it is included in the covenant calculation. ===== SIDA 26 ===== | GLOSSARY AND BOARD OF DIRECTORS’ APPROVAL Humble Group AB Interim Report July - September 2024 25 GLOSSARY FMCG FMCG is an industry term and is short for Fast-Moving Consumer Goods. 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. LTM Short for Last twelve months. Proforma Present the income statement before intra group eliminations in all entities in the group where an agreement of acquisition or divestment have been entered. The purpose is to visualise how the Group's financial position and results would have looked like at the date of this report if the companies acquired during the year, or where acquisition agreements have been communicated had been consolidated with the existing part of the Group for twelve months. 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 October 31st, 2024 Dajana Mirborn Ola Cronholm Chairman of the Board Board member Henrik Patek Pål Bruu Board member Board member Sara Berger Noel Abdayem Board member Board member Simon Petrén Chief Executive Officer 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 October 31st, 2024, at the time specified by Humble Group's news distributor Cision at the time of publication of this press release. ===== SIDA 27 ===== | AUDITOR’S REPORT ON REVIEW OF INTERIM REPORT Humble Group AB Interim Report July - September 2024 26 TO THE BOARD OF DIRECTORS OF HUMBLE GROUP AB, REG.NR. 556794-4794 Introduction We have reviewed the condensed interim financial information (interim report) for Humble Group AB as of September 30th, 2024 and the nine-month period which ended on this date. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Scope of review We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim report consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company. Stockholm October 31st, 2024 BDO Mälardalen AB Carl-Johan Kjellman Authorized Public Accountant ===== SIDA 28 ===== | CONTACT US Humble Group AB Interim Report July - September 2024 Company Registration Number 556794-4797 Headquarters Ingmar Bergmans gata 2 114 34 Stockholm info@humblegroup.se www.humblegroup.se +468 613 28 88 Johan Lennartsson Chief Financial Officer johan.lennartsson@humblegroup.se Simon Petrén Chief Executive Officer simon.petren@humblegroup.se Noel Abdayem Vice President & board member noel.abdayem@humblegroup.se Marcus Stenkil Chief Operating Officer marcus.stenkil@humblegroup.se Kristoffer Zinn Chief Analytics Officer kristoffer.zinn@humblegroup.se