Humble : Interim report Humble Group Q1 ENG 2024-05-02

INTERIM REPORT

JANUARY - MARCH 2024

INTERIM REPORT

JANUARY - MARCH 2024

STRONG DEMAND AND IMPROVED PROFITABILITY

Financial information

First quarter

• Net sales amounted to MSEK 1,838 (1,592), an increase with 15% compared to the corresponding period last year. The organic growth for the period was 11%.
• EBITA amounted to MSEK 133 (130).
• EBIT amounted to MSEK 86 (85).
• Adjusted EBITA amounted to MSEK 128 (102), an increase with 25% compared to the corresponding period last year.
• Cash flow from operating activities amounted to MSEK 60 (183).
• Profit and loss after tax amounted to MSEK 23 (-3).
• Earnings per share before and after dilution amounted to SEK 0.05 (-0.01).

Significant events

During the first quarter

• Humble Group completes the sale of all shares in Bayn Production AB as part of the Groups long-term strategy to streamline the operations.
• Humble Group creates a joint company together with the creators of "Babblarna", a well-known brand for families in Sweden.

After the quarter

• Humble Group completes the second part of the sale of properties, which is structured as a sale and leaseback transaction.
• Humble Group summons to the annual general meeting to be held on May 22, 2024.
• The election committee has proposed re-election of the existing board members as well as election of Noel Abdayem as a new board member, who is also an existing member of the senior executive team.

Financial overview

	First quarter
MSEK	2024	2023
Net sales	1 838	1 592
Gross profit	566	485
Gross margin	31%	30%
EBITDA	157	156
Adjusted EBITDA	152	128
EBITA	133	130
Adjusted EBITA	128	102
EBIT	86	85
Adjusted EBIT	81	58
Cash flow from operating activities	60	183
Earnings per share before dilution (SEK)	0,05	-0,01

Last Twelve	Full year
Months
Apr 2023 -	2023
Mar 2024
7 295	7 050
2 210	2 129
30%	30%
660	659
640	617
550	547
531	505
318	318
299	276

965 1 088

-0,22-0,28

See page 24 for definition and calculation of key ratios

Humble Group AB Interim Report January - March 2024	Humble Group is a leading FMCG Group
comprising 47+ entrepreneurial driven entities, with
Stockholm, May 2, 2024	focus on health and well-being in a sustainable way

| SUMMARY

STRONG DEMAND AND IMPROVED PROFITABILITY

We begin 2024 with stable growth in the group, where net sales amounted to SEK 1,838 million (1,592), a total increase of 15 percent, of which 11 percent constitute organic growth. Considering that we had a negative calendar effect of approximately -4 percent as a result of the early Easter, we feel satisfied with the development in the various segments. The work to strengthen the profitability has begun to yield results and the adjusted EBITA margin strengthened from 6 percent to 7 percent, where adjusted EBITA increased by 25 percent to SEK 128 million (102). The cash flow from operating activities developed well and amounted to SEK 127 million (102). The change in working capital negatively affected the free cash flow, as a result of strategic investments in inventory before price increases and rising cocoa prices at some of the distribution companies. The gross margin has continued to develop in the right direction and amounted to 31 percent (30). The relative increase was greater, as we did not fully consolidate all the Privab companies during the comparison period, which have a lower gross margin than the rest of the group. Humble has a good momentum and we have a positive view of the development going forward, with a focus on continued expansion and growth.

Operations

We have a consistent positive development in our business areas and our team is doing an outstanding job of positioning the group for increased growth going forward. Strategic initiatives aimed at expanding market presence and improving product offerings continues to develop and we are excited for the autumn, when we will begin to see the impact of scale-up in the factories as well as the results of the larger product launches that will be rolling out.

Within Future Snacking, we have continued to expand internationally, with a strong response from new chains and customers. Our international launch of sugar-reduced sweets has performed better than expected and we are continuously mapping the possibilities for faster expansion. As a result of strong demand, we have had some challenges in producing products at the required pace. It is one of our highest priorities internally to address and we are doing everything we can to ensure a continuous supply of goods. True Gum affected the segment negatively by SEK -18 million, due to high comparative figures from last year, which was exceptionally strong. With several promising product launches and an improved recipe for our chewing gum, we look forward to these initiatives reaching the market.

In Quality Nutrition, we have similar challenges to those in the Future Snacking segment. Demand for bars, powders and the upcoming energy drink production is sky high. All the extra capacity that will be available during the year is already pre- booked by external customers and our own brands. Now it's about maximizing the production flow in the factories. The success

"I'm very excited about the

several ongoing initiatives, that will continue to fuel our growth."

within the BodyScience brand is particularly noticeable, which is expanding strongly and has quickly taken a market-leading position in Australia. We also recently launched a Swedish innovation in the form of a soft bar, where we have already started manufacturing the products in the group's new bar factory by exporting our recipe knowledge to Australia. The product also won the prize for protein bar of the year 2024 by Nutrition Warehouse in April and the chains appreciate the new innovation on the market.

For the Sustainable Care segment, Solent is a locomotive. It is the group's largest company that increased net sales by 14 percent and strengthened profitability by 34 percent. We see a return to growth at several of the premium brands and have a clear trend shift in the form of organic growth and improved margins at the subsidiaries that previously had a tough time. With completed investments and strengthened management, I am convinced that we have laid the foundations for a recovery to previous levels.

The distribution segment shows satisfactory growth, but the result is still dragged down by costs related to the integration processes. We are approaching the final phase of consolidating the Privab companies and have now directed our focus to improving the gross margin, through joint purchases and a more efficient pricing strategy. Given that we sell a lot of chocolate confectionery products where we import in USD and EUR, we have had an inventory tie-up that constitutes a significantly higher percentage of the sales increase than normal. With high inventory turnover and seasonally larger quarters ahead, our assessment is that there are good conditions to free up the tied-up capital and thus get down to a lower working capital level relative to turnover.

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| SUMMARY

Results

The quarter marked a significant improvement in our profitability, which is a testament to the strength of our business model. We have not yet received the full benefit of the investments and consequent cost increases that scaling up in the factories has entailed. It is an effect that will be showcased when the extended shift runs are in full use. We have increased our marketing investments, which are thoughtful strategic decisions aimed at promoting growth in the coming years. With the strong product reception from the market that we have, it is important that we continue to invest for long-term returns.

The gross margin has strengthened compared to the comparison period, despite a negative consolidation effect of the Privab companies. It remains a high-priority area for the group and there are many improvement measures that remain to be implemented. We still have some accounting technical costs from the IFRS transition that drag down the net financial result, but still generated a profit after tax of SEK 23 million during the first quarter. As these items gradually roll out, our assessment is that we are facing a strong improvement of the KPI going forward.

Outlook

There is great optimism in the group. We are starting to get through the tough time that the margin pressure of the last two years entailed and we have an operational focus on ensuring the effective implementation of all the strategic initiatives that are underway. The second quarter has started strongly and if we manage to get the increased capacity in the factories and roll out the major product launches that are in the pipeline, we are in for an exciting autumn.

The process with changing trading market is proceeding according to plan and we are now well into the process, where it should not be too long before we make the step up to the main market. With the new capital structure in place, amortization of debt and lower interest costs, we see that our room for action to invest in continued growth is increasing. Of course, it is important to be vigilant on future challenges that may arise in a troubled environment, but with the degree of maturity we established during last year's consolidation period, we are better equipped than ever to take on the gigantic market that is out there.

Simon Petrén

CEO Humble Group

Stockholm, May 2, 2024

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| CONSOLIDATED DEVELOPMENT

HUMBLE GROUP'S FINANCIAL DEVELOPMENT

FIRST QUARTER

REVENUES

Net sales

Net sales for the quarter amounted to MSEK 1,838 (1,592), an increase of 15% compared to the corresponding period last year. The change is attributable to completed business acquisitions of 3%, organic growth for the wholly owned subsidiaries in both periods of 11% and currency impact was 1%.

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. This implies a significant change going forward of the recognised revenue from capitalized work on own account from Q1, 2024. For Q1 2024 the amount was 1 MSEK (20).

EXPENSES

Other external expenses

Other external expenses for the quarter amounted to MSEK -242(-208), which corresponded to 13% (13) of net sales. Acquisition related costs for the quarter amounted to MSEK 0 (-3).

Personnel expenses

Personnel expenses for the quarter amounted to MSEK -198(-183), 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 -8(-12). Remaining increase is mainly explained by additional employees in the Group through the acquired subsidiaries. For more details, please refer to Note 7 Items affecting comparability.

Depreciation and amortization

Total depreciation and amortization for the quarter amounted to MSEK -71(-71), which corresponded to a change of 0% compared with the corresponding period last year. Depreciation of right-of- use assets amounted to MSEK -17(-14) for the quarter.

Amortization of assets related to acquisitions, of which a vast majority related to customer relations, amounted to

MSEK -36(-36).

Financial expenses

Financial expenses for the period amounted to MSEK -63

(-84). Interest expense related to unwinding of discounting effect of contingent considerations and other liabilities presented at fair value amounted to MSEK -19(-18). Such interest expense has no cash effect in the quarterly result.

For more details, please refer to Note 5 Financial expenses.

RESULTS

EBITA

Adjusted EBITA amounted to MSEK 126 (102), which corresponded to a change of MSEK 24 or 24% for the period. EBITA for the quarter amounted to MSEK 131 (130), which corresponded to a change of MSEK 1 compared with the corresponding period last year. For more details, please refer to Note 7 Items affecting comparability.

EBIT

Adjusted EBIT amounted to MSEK 79 (58), which corresponded to a change of MSEK 21 or 36% for the period. EBIT for the quarter amounted to MSEK 84 (85), which corresponded to a change of MSEK -1 compared with the corresponding period last year.

CASH FLOW

Cash flow from operating activities

Cash flow from operating activities amounted to MSEK 60

(183). Cash flow from operations was negatively impacted by net working capital increase, mainly in inventory of MSEK -67 (82). The Group continue the work with several strategic initiatives to optimize the net working capital usage going forward.

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| SEGMENT INFORMATION

SEGMENT REPORT - FUTURE SNACKING

SEGMENT OVERVIEW

Our commitment to cutting-edge, sustainable snacks and assorted eats challenges conventional options, prioritizing health without compromising taste, quality, or experience. The segment is estimated to hold over 90% share in sugar-free and healthier candy offerings across the Nordics.

Driven by a passion for innovation, our subsidiaries leverage high technological barriers, limiting competitors' market entry. Our leading brands enjoy strong recognition in the innovative space, setting us apart in the industry. Apart from our brands, we serve as a flexible, solutions-oriented contract manufacturer for Nordic market players, ensuring agility and responsiveness in meeting their needs.

Humble Group's vision: to be the leading provider of high-qualitysugar-reduced and confectionary snacks.

• True Gum continues to expand and has secured new listings. Despite this growth, the company encountered challenging comparable figures due to isolated extraordinary effects in Q1 2023 of -18 MSEK, which had a significant effect on the segment growth.
• The Tweek production move to Grahns Konfektyr, arising from the divestment of Bayn Production, has faced certain challenges and caused delays.
• The integration of MCN and Tweek into FCB has progressed effectively.
• Continued capacity restraints in Arena Confectionary. Results from initiatives is expected to take effect in Q2- Q3 2024. We continue to see further potential in utilizing coordination of capabilities and resource planning for maximised output.
• Soya received B-Corp certification.

SEGMENT UPDATE

The most significant events and initiatives for the segment during the quarter comprise, among others:

• The sales trajectory for confectionery and snacks remains robust with a positive momentum. Notably, Pändy has secured further new listings in existing, and new, markets.

SALES AND PROFITABILITY

Net sales decreased with 0% and amounted to MSEK 237 (238) during the quarter. Adjusted for True Gum and divestment of Bayn Production, the total growth was 11%. Adjusted EBITDA for the quarter amounted to MSEK 29 (26), with an Adjusted EBITDA margin of 12% (11). For further financial information of the Group, please 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.

FUTURE SNACKING	First quarter
Amount in MSEK	2024	2023
Net sales	237	238
Raw material and consumables	-132	-136
Gross profit	104	102
Gross margin	44%	43%
EBITDA	43	23
Items affecting comparability	-14	4
Adjusted EBITDA	29	26
Adjusted EBITDA in relation to net sales	12%	11%
EBITA	35	13
Adjusted EBITA	21	17
Adjusted EBITA in relation to net sales	9%	7%
EBIT	25	6
Adjusted EBIT	11	10
Adjusted EBIT in relation to net sales	5%	4%

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| SEGMENT INFORMATION

SEGMENT REPORT - SUSTAINABLE CARE

SEGMENT OVERVIEW

Sustainable Care encompasses a wide range of brands, distributors, and manufacturers that cover multiple categories across organic household, personal care, beauty, and oral hygiene products. These entities unite to address the increasing demand for eco-friendly and sustainable products that promote a healthier planet and align with consumer preferences for environmentally conscious choices.

• Solent, the largest entity in the segment, delivered two- digit topline growth with an improved profitability margin. Solent continues to showcase its role as a dynamic retail partner for the Group's brands.
• The Humble Co. US continued to perform well with top- line growth and an improved gross margin. This combined with a leaner operations team, the entity has recovered to a sound profitability level for the quarter.

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 make a positive impact on both personal well-being and the planet as a whole.

Humble Group's vision: a modern personal- and home care retail partner.

SEGMENT UPDATE

The most significant events and initiatives for the segment during the quarter comprise, among others:

SUSTAINABLE CARE

Amount in MSEK

• The reorganization in Naty, alongside the implemented cost-efficiency programme, has started to show result and Naty has now recovered to a sound profitability level.
• The operational strategic development initiative in Fancystage is progressing as planned.

SALES AND PROFITABILITY

Net sales increased with 8% and amounted to MSEK 522 (484) during the quarter. Adjusted EBITDA for the quarter amounted to MSEK 62 (52), with an Adjusted EBITDA margin of 12% (11). For further financial information of the Group, please 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.

First quarter

2024 2023

Net sales	522	484
Raw material and consumables	-336	-317
Gross profit	186	167
Gross margin	36%	34%
EBITDA	66	65
Items affecting comparability	-3	-13
Adjusted EBITDA	62	52
Adjusted EBITDA in relation to net sales	12%	11%
EBITA	61	58
Adjusted EBITA	57	45
Adjusted EBITA in relation to net sales	11%	9%
EBIT	36	33
Adjusted EBIT	32	20
Adjusted EBIT in relation to net sales	6%	4%

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| SEGMENT INFORMATION

SEGMENT REPORT - QUALITY NUTRITION

SEGMENT OVERVIEW

Quality Nutrition is dedicated to delivering premium nutritional products and supplements for athletes and the everyday consumer, focusing on enhancing well-being, performance, and health. With several highly recognized brands in innovative spaces, the segment set industry standards and holds a unique market positioning in the nutrition category.

Our full-service offering across product categories and scalable production ensure adaptability, while serving as a flexible, solutions-oriented contract manufacturer for European market players. Through Arena Nutrition, we provide Nordic market players with a local sourcing alternative for a comprehensive range of nutritional ingredients, further enhancing our commitment to sustainability and quality.

Humble Group's vision Nordics: Leading Business to Business supplier of sport nutrition products.

Humble Group's vision Australia: A sports nutrition powerhouse.

collaboration between Bars Production in Gråbo, Bars Production Australia and Body Science. This signifies our ability to utilize cross-subsidiary competences and resources to develop, manufacture and distribute competitive products in a fast-paced manner.

• Continued progress in the implementation of drink production line at Habo, Sweden site. First trials are still expected by end of H1 2024.
• Manufacturing units under Arena Nutrition are experiencing high demand. Increased shifts and streamlining measures have been, and are currently being, implemented to solve short-term capacity restraints. Additional production lines and further strategic initiatives are underway to ensure we can meet long-term demand and growth.
• Several new product innovations with cross-subsidiary collaborations are progressing well.

SEGMENT UPDATE

The most significant events and initiatives for the segment during the quarter comprise, among others:

• Body Science received an award for "Best New Protein Bar for 2024" relating to its newly launched soft bar. The product launch is a result of a close

SALES AND PROFITABILITY

Net sales increased with 13% and amounted to MSEK 389 (345) during the quarter. Adjusted EBITDA for the quarter amounted to MSEK 39 (33), with an Adjusted EBITDA margin of 10% (10). For further financial information of the Group, please 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.

QUALITY NUTRITION	First quarter
Amount in MSEK	2024	2023
Net sales	389	345
Raw material and consumables	-267	-253
Gross profit	122	91
Gross margin	31%	26%
EBITDA	34	55
Items affecting comparability	5	-22
Adjusted EBITDA	39	33
Adjusted EBITDA in relation to net sales	10%	10%
EBITA	28	50
Adjusted EBITA	33	28
Adjusted EBITA in relation to net sales	8%	8%
EBIT	21	42
Adjusted EBIT	26	20
Adjusted EBIT in relation to net sales	7%	6%

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| SEGMENT INFORMATION

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.

Leveraging the expertise of our Nordic Distribution subsidiaries, Humble are poised to deliver an extensive range of FMCG products that are tailored to the diverse tastes and preferences prevalent in the region. This collaborative strategy underscores our commitment to effectively addressing the unique demands of the local market and ensuring a comprehensive product portfolio that resonates with our valued customers.

Humble Group's vision: Number 1 distribution partner for healthy and sustainable brands.

SEGMENT UPDATE

The most significant events and initiatives for the segment during the quarter comprise, among others:

• Slightly weaker margin levels across the segment, mainly due to prices increases from suppliers. As a result of the development in prices, several subsidiaries have made larger purchases to hedge against further negative spikes.
• Focus remains on improving the gross margin, which in our view is the most essential factor to increase

bottom-line results in a highly margin sensitive industry.

• Freight and logistics centralisation project is progressing and is expected to contribute to an improved gross margin further down the line once we can fully capitalize on the benefits.
• Implementation of new IT infrastructure across several subsidiaries are well underway, although integration projects of this magnitude take time.
• A private label offering project has been initiated where we aim to coordinate our distribution access points and split up customers to ensure that we can offer competitive pricing and optimized logistic solutions to our Nordic customers.

SALES AND PROFITABILITY

Net sales increased with 31% and amounted to MSEK 691 (526) during the quarter. Adjusted EBITDA for the quarter amounted to MSEK 34 (25), with an Adjusted EBITDA margin of 5% (5). For further financial information of the Group, please 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.

NORDIC DISTRIBUTION	First quarter
Amount in MSEK	2024	2023
Net sales	691	526
Raw material and consumables	-536	-402
Gross profit	154	124
Gross margin	22%	24%
EBITDA	31	22
Items affecting comparability	3	3
Adjusted EBITDA	34	25
Adjusted EBITDA in relation to net sales	5%	5%
EBITA	24	19
Adjusted EBITA	27	21
Adjusted EBITA in relation to net sales	4%	4%
EBIT	18	14
Adjusted EBIT	22	17
Adjusted EBIT in relation to net sales	3%	3%

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| OTHER INFORMATION

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 Group 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

The average number of employees in the Group for the year was 1,146 (1,067). The proportion of women in the Group for the full year was 45% (49).

Parent company

The average number of employees in the Parent Company during the year was 20 (20), with 29% (26) 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 increased inflation and rising interest rates with a following 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 for a total purchase price of MSEK 7.7.

No other significant events occurred in Humble Group AB during the first 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.

PROPOSED APPROPRIATION OF PROFITS

The Board of Directors proposes that no dividend will be paid for the financial year 2023.

FINANCIAL CALENDAR

The interim report for the period April-June 2024 will be published on July 24, 2024.

For financial reports and calendar, see more detailed information on our website www.humblegroup.se

CERTIFIED ADVISOR

FNCA Sweden AB

Email:[e-mail]

AUDITORS

BDO

Auditor in Charge: Carl-Johan Kjellman,

Authorised Public Accountant

Email:[e-mail]

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