"It is a great pleasure to summarize an eventful first half of 2022, with 13 completed acquisitions and sales of SEK 2,994 million pro forma. In total, we achieved an increase in sales of SEK 586 million, which means organic growth of 24% for all the group's acquired companies. The companies we owned throughout 2021 had an organic growth of 50%. We have strengthened the gross margin for the third consecutive quarter and at the same time carried out several major investments and initiatives to continue to grow the business internationally, with new products for more channels and markets. We have also established a scalable platform to increase profitability and the Group's long-term growth. Despite all the challenges of a volatile world, we are better equipped than ever to take on the opportunities that our position in health and sustainability offers." says Simon Petrén, CEO Humble Group AB.
FINANCIAL INFORMATION:
SECOND QUARTER
- Net sales amounted to SEK 981 million (166).
- Adjusted EBITDA amounted to SEK 94 million (23).
- EBITA amounted to SEK 70 million (0).
- Adjusted EBITA amounted to SEK 82 million (15).
- Adjusted EBITA per share amounted to SEK 0.28 (0.13).
- Earnings per share amounted to SEK -0.76 (-0.36).
- Cash flow from operating activities before changes in working capital amounted to SEK 74 million (0).
PRO FORMA SECOND QUARTER*
- Net sales amounted to SEK 1 547 million (1 262).
- Adjusted EBITDA amounted to SEK 138 million (133).
- EBITA amounted to SEK 104 million (82).
- Adjusted EBITA amounted to SEK 125 million (121).
- Adjusted EBITA per share amounted to SEK 0.42 (0.41).
SIGNIFICANT EVENTS
DURING THE QUARTER
- Humble completes several acquisitions, including Go Superfoods Ltd, MedicaNatumin AB and LEV Group.
- Bumblebee carries out a directed share issue of approximately 33 million shares, which provides the group with liquid funds corresponding to SEK 530 million.
- Humble successfully issues additional bonds of SEK 250 million.
AFTER THE END OF THE QUARTER
- Humble completes the acquisitions of Amber House, Body Science, Privab Nässjö and Privab Stockholm.
- Humble holds an Extraordinary General Meeting, Ola Cronholm is elected as a new board member, replacing Thomas Petrén.
- Humble successfully issues additional bonds of SEK 50 million.
CEO WORDS FROM THE REPORT
"INTERNATIONAL EXPANSION AND CONTINUED HIGH DEMAND
It is a great pleasure to summarize an eventful first half of 2022, with 13 completed acquisitions and sales of SEK 2,994 million pro forma. In total, we achieved an increase in sales of SEK 586 million, which means organic growth of 24% for all the Group's acquired companies. The companies we owned throughout 2021 had an organic growth of 50%. We have strengthened the gross margin for the third quarter in a row and at the same time carried out several major investments and initiatives to continue to grow the business internationally, with new products for more channels and markets. We have also established a scalable platform to increase profitability and the Group's long-term growth. Despite all the challenges of a volatile global environment, we are better equipped than ever to take on the opportunities offered by our position in health and sustainability.
The second quarter has been intensive and characterized by expansion, where sales increased to a total of SEK 981 million, an increase of 490% compared to the second quarter of 2021. Organic growth in the second quarter amounted to 44% for the wholly owned companies. On a pro forma basis, we have maintained the group's high growth, with sales in the second quarter amounting to SEK 1,547 million, an increase of SEK 286 million and organic growth of 23%. The high growth is reflected in the cash flow for the period, as we continue to invest in inventory and assets to deliver on the high demand we have from our customers. Profitability has followed the increase in sales, with pro forma EBITA amounting to SEK 104 million in the second quarter, an increase of SEK 21 million or 26%. Despite a troubled external environment with the terrible Ukraine conflict, rising inflation, price uncertainty and limited supply chain availability, our companies have continued to deliver and we have strengthened the gross margin to 35% in the second quarter. We have also carried out several major strategic investments in subsidiaries, which entailed costs for the second quarter totaling SEK 22 million. The costs have had a negative impact on the EBITA margin of 2.3% for the quarter, which can be found in increased other external costs and personnel costs. The investments include a greatly expanded sales force, preparation for IFRS and switching to a regulated market, internationalization, establishing an innovation center, building up a central organization for raw material purchases, carrying out two factory relocations, developing IT systems and analytical support, and establishing an Amazon platform for brands at Group level. The investments made are important in the long term to further accelerate our growth and give us good opportunities to strengthen the margin in the future, where we can scale the business with the existing organization without any major increase in overhead costs. The first half of the year has seen a record sales increase of SEK 100 million in the companies owned throughout the period 2021, which means an organic growth of 50%. Profitability strengthened and pro forma EBITA amounted to SEK 222 million, an improvement of SEK 57 million corresponding to an increase of 35%.
Investing in innovation and the future
We have continued to implement planned acquisitions and established a central organization that works to develop the Group's profitability on a daily basis and support our entrepreneurs in their business development. Our strategy is to prioritize growth and we now own a larger part of the value chain in several product categories. Investments in scalable system support, labs, more efficient machines in production and strengthened sales capacity are just some of the pieces of the puzzle that will give Humble increased manufacturing capacity and enable a higher level of innovation and technical excellence in the future.
Price increases to strengthen margins going forward
As far as profitability is concerned, the second quarter has resulted in a slightly lower EBITA margin than the first quarter. The underlying factors are primarily the investments that have been made, but also the fact that we have had some delays in price transfers of increased input prices driven by high inflation and a challenging raw material market. There have also been continued high freight costs compared to previous years. However, we are getting indications of a positive development in the coming months. The two factory relocations that have been carried out ensure significantly lower costs for production and logistics in the coming year and we have secured fundamental price increases throughout to the retail level, which we expect to see the effect of from September onwards. We are continuously monitoring the margins for our products and are working on efficiency improvements to strengthen the Group's long-term profitability towards the financial target of at least 12% EBITA.
Synergies and geographical expansion
With our central team continuously working on group synergies and value chain efficiency, we can demonstrate with data that our synergy platform is very effective in increasing net sales and that the subsidiaries have developed stronger under the Humble umbrella than before. We recently acquired Body Science, a leading Australian sports nutrition and health food brand. The company is our first acquisition in Asia, which means many opportunities for expansion, and we have already started the process of integrating and identifying which Humble brands are suitable for each market and channel. I am pleased to report that we have already made progress with listings and that our Nordic products will soon be available for purchase on the other side of the globe. During the first half of the year, we have developed distribution with several export initiatives, where we are internationalizing several brands and products in the portfolio in some of the world's largest markets. The focus markets for expansion are the US, China, the UK and Germany, where with the Group's platform we have good opportunities to be listed with the world's leading retail chains.
An exciting fall
Our companies show continued growth in the beginning of Q3 and the work to realize identified synergies between subsidiaries continues. The M&A team is in discussions with several strategic acquisitions, where we hope to move forward and continue our journey. The ongoing IFRS conversion is going according to plan and we will be ready for a change of listing in 2023. With the great energy within the Group, it feels like our possibilities are endless, which is of course very inspiring for the future! In conclusion, I am very much looking forward to what the fall has to offer.
* The pro forma presented in this interim report shows what the consolidated results of Humble Group would have looked like if all announced acquisitions up to the date of this interim report had been consolidated as of January 1, 2022.
Download the full report here
For further information, please contact:
Simon Petrén, CEO, Humble Group AB
Tel: +46 70 999 94 55
Email: simon.petren@humblegroup.se
This information is information that Humble Group AB is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information in this press release was published through the agency of the contact person set out above, at the time stated by Humble Group's news distributor Cision at the time of publication of this press release.
About Humble
Humble Group is a Swedish foodtech and FMCG group delivering the next generation of consumer products that are good for people and the planet. Humble focuses on the foodtech, eco, sustainability and vegan segments. The company is growing through organic growth, acquisitions and leveraging synergies across its business units: brands, distribution, manufacturing and ingredients. Humble's technologies, refined through scientific research and extensive market experience, facilitate new formulations and recipes that improve taste and texture for the next generation of sugar-reduced, sustainable and vegan products. For more information visit www.humblegroup.se
Humble is listed on Nasdaq Stockholm, First North Growth Market, under the ticker HUMBLE.
FNCA Sweden AB is Humble's certified adviser. Tel: 08-528 00 399 E-mail: info@fnca.se
Forward-looking statements
This press release contains forward-looking statements that reflect Humble's intentions, beliefs or expectations regarding Humble's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which Humble operates. Forward-looking statements are statements that are not historical facts and can be identified by the use of words such as "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "anticipates", "should", "could" and, in each case, the negatives thereof, or similar expressions. The forward-looking statements in this press release are based on various assumptions, many of which are based on additional assumptions. Although Humble believes that the assumptions reflected in these forward-looking statements are reasonable, there can be no assurance that they will materialize or that they are accurate. Because these assumptions are based on assumptions or estimates and are subject to risks and uncertainties, actual results or outcomes could differ materially from those in the forward-looking statements for a variety of reasons. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this press release by the forward-looking statements. Humble does not guarantee that the assumptions underlying the forward-looking statements contained in this press release are accurate and any reader of the press release should not place undue reliance on the forward-looking statements contained in this press release. The information, opinions and forward-looking statements expressed or implied herein are made only as of the date of this press release and are subject to change. Neither Humble nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, except as required by law or Nasdaq First North. Growth Markets' Rule Book for Issuers.
