Hövding Sverige : Interim report Q1 2021

Hövding Sverige AB

Quarterly Report January - March 2021

Continued increased demand for Hövding

Financial resultats for the period

• Number of Hövding helmets sold during the first quarter increased to 21,476 (13,646) (+57%)
• Net sales of TSEK increased to 33,185 (20,953) (+58%)
• Gross margin of 22% (15%).
• EBITDA of TSEK -7,497(-16,619)
• Profit before tax TSEK -8,857(-17,944)
• Profit per share SEK -0,32(-0,81)
• Cash flow from operating activities TSEK -8,795(-24,113)

											JAN-MAR	JAN-MAR
												2021		2020		%
	Net sales, KSEK											33 185		20 953		+58,4
	EBITDA, KSEK											-7 497		-16 619		+54,9
	Net income, KSEK											-8 857		-17 944		+50,6
	Earnings per share, SEK										-0,32		-0,81		+60,3
	Cash flow from operating activities, KSEK							-8 795		-24 113		+63,5
QUARTERLY NET SALES AND EBITDA 12 MONTHS ROLLING
																153	165
															146
				104	107				113		114	119
			93	96
		85
70
															-26%	-23%	-16%
				-38%	-39%
-51%	-43%	-42%	-51%		-43%	-48%	-42%
	Q2	Q3	Q4			Q1	Q2	Q3	Q4		Q1	Q2	Q3	Q4		Q1
		2018					2019								2020			2021
						Net sales SEKm				EBITDA % (excl. restrucuring costs

1	HÖVDING ÅRSREDOVISNING 20191

HÖVDING SVERIGE AB INTERIM REPORT Q1 2021

Continued increased demand

The number of Hövding helmets sold during the first quarter 2021 increased by 57% compared to the same period last year. Net sales increased by 58% to 33 185 SEK.

The three key markets, Sweden, Denmark and Germany, continue to represent a significant share of sales. The Swedish market shows growth by +61%, the Danish market by +85% and the German market by +5%. The lower growth in Germany is explained by phasing of distributor orders resulting in higher levels than normal last year. Other countries represent 13% (3%) of units sold. We will, moving forward, pay special attention to the French market that show increased interest and demand for Hövding.

The pandemic continues to be present in our evaluation of the quarter. In March 2020 we did not see the normal acceleration of sales during spring as we have seen previous years. This year, again, we experienced more of normal pattern which has a positive effect on the year-on-year comparison. It is also still evident that the pandemic related restrictions for physical sales that have been enforced in Germany and Denmark has to a certain extent negatively effected our sales. As a consequence, our online partners and our own web sales have taken a greater share of Hövding's overall sales.

Supply during the quarter has been adequate although part of this is thanks to our decision to move some shipments from sea to air. Both modes of transport have seen an increase in shipping cost in general which is likely to remain the case for a while longer. The logistical challenge will continue to be present and we are therefor planning for higher inventory coverage to ensure units for the continued growth planned.

In order to counteract the increased product related cost that we experience due to the pandemic the recommended consumer price for Hövding 3 was amended to €349 starting April 1st. The timing of this change also matches our position in the market. We are to various degrees established in our three core markets, while new markets are still in the pipeline to be launched. The initial response from the market on the price change has been good and it safeguards our existing margin and gives us opportunity to improve margin over time. The coming months will be a transition period and we expect to see an effect of the change during our third quarter. Next to this we will continue to implement our gross margin improvement plan that includes actions in product, sourcing and reduction of warranty reserves.

2021 starts as 2020 ended. Organizational focus on cost control, step by step gross margin improvement and sales growth driven by our key markets while we look to expand to new markets selectively.

The result for the quarter mirrors this plan. Ebitda was -7 497 (-16 619) KSEK and over 12 months rolling we have on a quarterly basis gone from -42% to -16% Ebitda.

We have a positive momentum and are off to a good start of the year. There is still work to be done to reach sustainable profitability and the continuous improved results creates energy to reach this goal. The pandemic is still present both in supply and in sales, but with this in mind, we plan and manage and the organization has shown great example of agile and flexible thinking which helps us now and in the future.

Fredrik Carling, CEO

Hövding Sverige AB (publ)

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HÖVDING SVERIGE AB INTERIM REPORT Q1 2021

Sales and results

• Net sales for the period were TSEK 33,185 (20,953).

The number of helmets sold during the period reached 21,476 (13,646). Of these, 40% (46%) were sold through wholesalers, 53% (51%) through retailers and 7% (3%) through the company website. Sales share by country shows Sweden 32% (32%), Denmark 25% (21%), Germany 29% (43%), the UK 1% (1%) and for other countries 13% (3%).

The gross margin for the period amounts to 22% (15%). The gross margin is mainly affected by production costs at 82% (82%), transport and customs at 5% (7%), and provision for future and existing warranties at 13% (11%).

Our business expenses during the period reached TSEK 14,832 (19,726). Among the expenses,

TSEK 5,502 (8,305) denotes miscellaneous, and TSEK 7,970 (9,926) refers to staffing costs. EBITDA for the quarter was TSEK -7,497(-16,619). Profit for the period before tax amounted to TSEK -8,857(-17,944) having been burdened by write-offs and devaluations of intangible assets at TSEK -1,124(-1,014) and tangible assets at TSEK -176(-183).

Investments

No significant investments were made during the quarter.

Liquidity and financing

The liquidity of the company at the end of the period amounted to TSEK 53,172 (5,647). Cash flow from the ongoing operations during the period amounted to TSEK -8,795(-24,113).

Employees

As per 31 March 2021 the number of employees was 35 (42).

Risk factors

Risk factors are described in Hövding's 2019 annual report on page 52.

Certified Advisers

Västra Hamnen Corporate Finance AB is Hövding's Certified Adviser.

Date of report

At the end of each new quarter, Hövding publishes a financial report. The next report is scheduled for publication on

• 3 August - Interim report quarter 2 2021

Accounting principles

This report is presented according to the Annual Accounts Act and BFNAR 2012:1 (K3).

Auditor

This report has not been audited by the company's auditor.

Corporation details

Hövding Sverige AB (publ), organisation number 556708-0303, is a limited liability company located in Malmö. The company's shares are listed on Nasdaq First North Growth Market in Stockholm.

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HÖVDING SVERIGE AB INTERIM REPORT Q1 2021

Information

Please direct any queries regarding the content of this interim report to:

CEO Fredrik Carling Ph: 040 - 236868 [e-mail]

Hövding Sverige AB (publ) Bergsgatan 33

214 22 Malmö + 46 40 236868

The company board and the CEO confirm that this interim report gives a fair overview of the company operations, position, and results.

Fredrik Arp (ordf)	Helen Richenzhagen	Tony Grimaldi
Alexander Izosimov	Maria Minskova
Fredrik Carling (vd)

Hövding Sverige AB (publ) is listed on the Nasdaq First North Growth Market since 2015. Västra Hamnen Corporate Finance AB is Hövding's Certified Advisor.

E-mail:[e-mail], tel: [phone]

For further information, please contact Fredrik Carling on [phone]

High resolution images can be downloaded here: www.mynewsdesk.com/se/hovding

The information herein is provided by Hövding Sverige AB (publ) in accordance with its duties of public disclosure as stipulated by the EU regulation on marketplace misuse. The information was made public by Fredrik Carling, CEO of Hövding Sverige AB (publ), on 4 May 2021 at 08.30am CET.

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HÖVDING SVERIGE AB INTERIM REPORT Q1 2021

Income statement

	JAN-MAR	JAN-MAR	JAN-DEC
(VALUES IN KSEK)	2021		2020		2020
Net sales	33	185	20	953	152	517
Other operating income		23		35	1	172
TOTAL OPERATING INCOME	33	208	20	988	153	689
Raw materials and consumables	-25 873	-17 881	-118 071
Other external costs	-5	502	-8	305	-35	804
Personnel costs	-7	970	-9	926	-37	094
Depreciation/amortization	-1	300	-1	196	-5	193
Other operating expenses	-1 359	-1 495	-1 278
TOTAL OPERATING COSTS	-42 005	-38 803	-197 440
OPERATING PROFIT (LOSS)	-8 797	-17 815	-43 751
Other interest income and similar profit (loss) items		0		10		32
Interest expense and similar profit (loss) items		-60		-139		-528
TOTAL FINANCIAL ITEMS		-60		-129		-496
PROFIT (LOSS) AFTER FINANCIAL ITEMS	-8 857	-17 944	-44 247
Tax on profit		0		0		0
NET PROFIT (LOSS)	-8 857	-17 944	-44 247
Earnings per share before and after dilution *)
Earnings per share	-0,32	-0,81	-1,82
Number of shares, average	27 730	100	22 281	105	24 368	053
Number of shares per closing date	27 730	100	22 281	105	27 730	100

*) There are warrants that can result in dilution, but since the result for the period is negative no dilution effect occurs (see definition of earnings per share after dilution).

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