The reasons for raising the targets are as follows:
- Humble has acquired more companies, and in a faster pace, than anticipated when the previous financial targets were established in March 2021. Humble signed binding agreements to acquire a total amount of 13 companies during the first 6 months of 2021. Combined, those companies generated a turnover of SEK 1,518 million with an adjusted EBITDA of SEK 216 million, during the twelve-month period starting from Q2 2020 up until Q1 2021.
- Several of the acquired companies have higher organic growth than our previously stated target.
- Humble has experienced a positive response from entrepreneurs and other relevant market participants, which, among other things, has resulted in more high quality companies reaching out to Humble, than previously anticipated.
- Humble has during the first six months of 2021 issued bonds and completed a directed share issue which in total has added SEK 1,400 million to the company, where the framework of the existing bonds enables further financing of up to SEK 1,000 million.
- Humble has during Q2 2021 completed a large procurement of bank services for the Humble Group, and have received several positive offers from leading Nordic banks, where a house bank will strengthen the entire groups bank service- and credit-terms substantially compared to the previous ones.
Due to the reasons mentioned above, the board has decided to raise the financial targets regarding growth and profitability in the medium-term (2025) to the following:
Growth – SEK 13 billion net turnover
The company aims to achieve a significant increase in turnover during the coming years, which will be primarily driven by organic growth in combination with acquisitions. The ambition of the company is to achieve a net turnover of SEK 13 billion on a proforma basis and to have an average organic growth of at least 15 percent per year.
Profitability – SEK 1.5 billion adjusted EBITDA
The company’s target is to achieve an adjusted EBITDA of SEK 1.5 billion on a proforma basis.
Humble’s other financial targets in the medium-term (2025) can be seen below and remain unchanged:
Capital structure – Net debt divided by adjusted EBITDA <2.5
Net debt in relation to LTM (last twelve months) adjusted EBITDA shall not exceed 2.5 times. However, the company can, under special circumstances, decide to exceed this level during shorter periods in connection with acquisitions.
Excess cash flow shall be paid out to the shareholders when the free cash flow exceeds available investment opportunities in profitable growth. Dividends to shareholders are dependent on the capital structure target being already fulfilled.
“I am incredibly excited to announce that in less than five months from establishing the previous financial targets, which many considered to be very ambitious, are so far ahead of our initial plan that we need to make a positive revision, with higher growth and profitability targets. The response from relevant market participants and entrepreneurs has been above our expectations, where we notice a strong interest from companies that want to become a part of Humble, and a united vision of our view on the transformation of the FMCG-market. We see further opportunities to maintain a high acquisition pace while we also increase our target for our organic growth, as we have noticed that many of our acquired companies have a higher organic growth than our previous target.” Says Simon Petrén, CEO Humble Group AB (publ).