"Seasonally, the first quarter is the weakest period of the year for our companies. Despite this, we are breaking sales records, with organic growth of 25% pro forma for all the companies we acquired in 2021 and 2022. Given that it has been a turbulent spring with many challenging external factors affecting the entire value chain, it is reassuring that we are starting to see the impact and benefits for our companies of being part of Humble. EBITA pro forma increased by a full 59% compared to the same period last year and the work to create more favorable conditions for the companies has paid off. In the current market situation, we need to continue to maintain a dynamic profile and continue with the intensive work to grow the Group and establish ourselves as a leading player in the FMCG products of the future." says Simon Petrén, CEO Humble Group AB.
FINANCIAL INFORMATION:
FIRST QUARTER
- Net sales amounted to SEK 879 million (88).
- EBITA amounted to SEK 85 million (0).
- Adjusted EBITDA amounted to SEK 102 million (7).
- Adjusted EBITA amounted to SEK 93 million (3).
- Adjusted EBITA per share amounted to SEK 0.37 (0.04).
- Earnings per share amounted to SEK -0.82 (-0.09).
- Cash flow from operating activities before changes in working capital amounted to SEK 91 million (-4).
PRO FORMA* FIRST QUARTER
- Net sales amounted to SEK 1 067 million (194).
- EBITA amounted to 102 (19).
- Adjusted EBITDA amounted to SEK 127 million (27).
- Adjusted EBITA amounted to SEK 115 million (19).
- Adjusted EBITA per share amounted to SEK 0.46 (0.14).
SIGNIFICANT EVENTS AFTER THE YEAR-END
- Humble Group carries out a directed cash issue of 33 million shares and raises SEK 528 million for the company.
- Humble completes the acquisition of MedicaNatumin AB and Go Superfoods Ltd.
- The Annual General Meeting was held on May 5, 2022 where the Board of Directors was re-elected and Thomas Petrén declined re-election.
CEO WORDS FROM THE REPORT
"STABILITY IN A CHALLENGING CLIMATE
FOCUS AREAS
Russia's invasion of Ukraine on February 24, 2022 changed the business climate globally and it was difficult to predict the external political developments that would take place. As the entrepreneurial group that we are, we have continuously adapted our business and development to operate in the uncertain conditions of war. Challenges in the form of rising raw material and energy prices, as well as increased freight costs, which were already at a high level in 2021, are important aspects that have been at the top of our agenda to address. In the Group, we have secured key transportation and logistics contracts, relocated production, divested certain products, and invested in increased inventory and raw material availability, activities that allow us to continue to grow and maintain a strong gross profit margin. Operating cash flow before changes in working capital was SEK 91 million, but due to the extraordinary investments in inventory and raw materials, operating cash flow after changes in working capital was SEK -1 million. We do not see this as a problem as the increase in working capital is a conscious and tactical growth investment that will benefit the group's growth and profitability in the long term. To add, our companies have historically proven to have a high cash generation and returned continuous dividends to their previous owners.
CONTINUOUS WORK THAT DELIVERS RESULTS
It is gratifying to summarize a first quarter with an aggregated pro forma organic growth of 25%, as well as several fine achievements in many of our companies that have managed to strike a good balance in the changing market conditions by identifying and acting on new opportunities, where other slower industrial players are clearly facing major challenges. Our entrepreneurs have also managed to pass on the increased costs to retailers and consumers, which is reflected in the fact that pro forma EBITA has also improved by 59% compared to the first quarter of 2021. This is a good indicator showing the Group's value creation, while we have established a good trend of steady growth in EBITA per share in recent quarters, which will strengthen our ability to organically finance further acquisitions.
The investment we have made with the parent company's operational management team and the synergy projects launched in the fall of 2021 have started to have an impact. We have several case studies of how the subsidiaries share intellectual property rights with each other and drive the Group's growth by selling our own brands into their new channels and markets. The Group's consolidated adjusted EBITA of SEK 93 million was boosted by both organic growth and a strengthened underlying margin of 10.2%. Due to seasonality, this is slightly lower than the 2021 average but at the same time higher than the comparable margin for Q1 2021 and we remain positive about our overall annual margin for 2022.
During the year, we acquired 6 selectively chosen businesses, all of which fit perfectly into our strategic matrix of segments and verticals. With our structural platform and focused acquisition strategy, we can naturally improve internal collaboration and offer a sharper product mix to our customers.
Despite some disruption in the capital markets, we completed a SEK 528 million directed share issue in April, providing the Group with cash for further acquisitions and new strategic owners who share our vision for our long-term journey with Humble. We are also actively evaluating opportunities to improve our funding profile and have an ongoing dialogue with banks and the debt capital markets to ensure that we streamline our capital structure and maximize our free cash flow.
SUSTAINABLE AND PROFITABLE GROWTH
The aim going forward is to maintain steady and profitable growth and continue on our path towards the financial targets. The management team is well staffed to manage a significantly larger group and ready to assist and integrate new businesses that become part of the group.
We have had a good start to the second quarter, with continued high sales and our subsidiaries delivering as expected and increasing compared to last year. Several raw material and sourcing contracts signed before the Ukraine crisis are starting to take effect in the third quarter and we expect to have full visibility in the profit margin from the fourth quarter. Our type of fast moving consumer goods generally meet a non-price sensitive consumer and we have not yet seen any major negative impact of inflation. Overall, this gives us a good indication that Humble will be able to stand strong, regardless of how the volatile macro environment develops in the future.
* The pro forma presented in this interim report shows how the consolidated results of Humble Group would have looked if all announced acquisitions up to the date of this interim report had been consolidated as of January 1, 2022.
For further information, please contact:
Simon Petrén, CEO, Humble Group AB
Tel: +46 70 999 94 55
Email: simon.petren@humblegroup.com
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.com
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.
