FINANCIAL INFORMATION:
FIRST QUARTER
- Net sales amounted to MSEK 1,904 (1,826), an increase with 4% compared to the corresponding period last year. The organic growth for the period was 4%.
- EBITA amounted to MSEK 115 (133).
- Adjusted EBITA amounted to MSEK 133 (128), an increase with 4% compared to the corresponding period last year.
- EBIT amounted to MSEK 70 (86).
- Cash flow from operating activities after net working capital amounted to MSEK 70 (60). Cash flow includes repayment of tax deferrals of MSEK -45.
- Profit and loss after tax amounted to MSEK 12 (23).
- Earnings per share before and after dilution amounted to SEK 0.03 (0.05).
SIGNIFICANT EVENTS:
DURING THE QUARTER
- No significant event has occurred during the quarter.
AFTER THE QUARTER
- Humble Group summons to the Annual General Meeting to be held on May 21, 2025.
- No other significant event has occurred after the quarter.
CEO COMMENT FROM THE REPORT
"The first quarter of the year was characterized by relatively strong fluctuations. The beginning was strong in several of our segments, but the development then slowed down, especially in March. The net sales increased to SEK 1,904 million (1,826), corresponding to an organic growth of 4 percent. The late Easter implies that a large proportion of sell-in will take place in April, while we see good conditions to deliver higher organic growth during the remainder of the year. The operating profit measured as adjusted EBITA amounted to SEK 133 million (129), mainly driven by an increase in gross profit that rose by 9 percent compared to the previous year. In parallel, we have consciously increased the sales and marketing investments in our fast-growing brands, costs that we can largely control ourselves, which overall strengthens our confidence that the strategy for sustainable growth and long-term value creation is effective.
FINANCIAL DEVELOPMENT
The gross profit and the margin developed well and improved both sequentially and compared to the corresponding quarter last year. The gross profit amounted to SEK 615 million (566), corresponding to a growth of 9 percent, with a gross margin of 32.3 percent (31.0). This is a result of continued execution of key initiatives and focus with our subsidiaries to locally optimize purchasing and shipping more cost-efficient.
The cash flow during the quarter amounted to SEK 70 million (60) after changes in working capital, where we have repaid a tax deferral of SEK -45 million, which is included in short term liabilities. Considering the repayment of the tax deferral, the cash flow after changes in working capital amounted to SEK 115 million (60), which corresponds to a satisfactory increase of 91 percent. The work to improve the working capital management is yielding results and is something that we will continue to prioritize. The net interest bearing debt ratio continued to decrease even though we had a negative impact from the strong Swedish krona exchange rate, which resulted in a cash flow impact from currency of SEK -22 million. However, it is important to add that over time we view a stronger exchange rate for the Swedish krona positively, as it may within a few quarters contribute to a further improved gross margin for our Swedish operations, which largely purchase goods in foreign currency. We also intend to reduce our interest expenses going forward through quarterly amortization of bank loans and increased profitability in absolute terms, where a reduced level of debt relative to EBITDA is expected to contribute to a lower financing cost for the Group.
The adjusted EBITA margin was unchanged at 7.0 percent (7.0), where other external costs had a negative impact. The increase in other external costs is a consequence of our prioritized investments in our fast-growing brands, where sales and marketing-related investments increased by SEK 18 million, corresponding to an increase of 18 percent. Our strategic goal is to continue investing in these brands in a balanced manner, where we are confident that the initiatives will deliver a high return on allocated capital over time.
PERSEVERANCE IN A VOLATILE MARKET
We are experiencing some uncertainty in the market linked to weaker sentiment and consumer concerns, mainly driven by the threat of trade tariffs. In the UK, the new regulations on labour have driven some concern among local retail chains, resulting in lower inventory levels in their central warehouses. For our group, we assess the effects of any tariffs on the US as marginal as our direct exposure towards the US market is low. In contrast, we see potential advantages in being a strong European player, where we have a well-diversified base of international suppliers for product procurement.
INVESTMENTS IN BRANDS AND GROWTH INITIATIVES
Over the past year, we have invested in brands that we believe have additional potential both nationally and internationally. This has paid off and we can demonstrate a higher organic growth in several of these brands. We see a continued need to invest in selected brands where we see potential for successful market expansion, albeit at a slightly lower rate of growth than we have had over the past year. It is my firm belief that the key investments we are making today will create an even stronger brand portfolio going forward. During the quarter, we continued to work on our strategic growth initiatives. The purpose of these initiatives is to further strengthen our capacity and position in areas such as Quality Nutrition and Future Snacking. As to the initiatives in Future Snacking, we have made further progress in the implementation and we are already starting to see positive results from historical investments. The initiatives in Quality Nutrition, which was the segment with the weakest development at the end of last year and also at the beginning of 2025, are starting to enter a financially yielding phase and we are positive about the segment's development for the second half of the year.
OUTLOOK
Humble's diversified operations have a natural resilience to weaker economic development and consumer sentiment. The exposure to private label and discount stores also means that we are confident in the demand when a potentially pressured consumer makes more price-conscious choices. In addition, the Better For You range of products and the Quality Nutrition segment also have sustainable macro growth and the conversion of new consumers contributes to a growing market. The operations remain fully focused on delivering profitable growth through investments for the future. At the same time, we are placing greater focus than ever on streamlining working capital levels and cash flow generation, and hope to deliver a significantly better first half of the year as a whole than in 2024. The work to shape Humble into a more efficient group continues and I look forward to executing on the strategy we have adopted for the year."
The report is attached and can also be downloaded in its entirety on the company's website here.
For more information, please contact:
Simon Petrén, CEO, Humble Group AB
Phone: +468 61 32 888
Email: simon.petren@humblegroup.se
This information is such that Humble Group is required to publish in accordance with EU Market Abuse Regulation 596/2014. The information in this press release has been published by the above contact person, at the time specified by Humble Group's news distributor Cision at the time of publication of this press release.
About Humble
Humble Group is a corporate group specializing in driving value and accelerating growth in small and medium-sized companies within the fast-moving consumer goods (FMCG) sector. Through an entrepreneurial approach and active ownership, Humble Group focuses on transforming its businesses to align with the future needs of consumers. The company manages a portfolio of brands, a global distribution network, and production facilities where its subsidiaries operate autonomously within their respective business areas, while Humble Group provides strategic guidance and support. The group is headquartered in Stockholm. For more information visit www.humblegroup.com
Humble is listed on Nasdaq Stockholm Mid Cap, under the ticker HUMBLE.
Forward-looking statements
This press release contains forward-looking statements that reflect Humble's intentions, beliefs, or current expectations about and targets for 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 may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Humble believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Humble does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this press release or any obligation to update or revise the statements in this press release to reflect subsequent events. Readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. 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, unless it is not required by law or Nasdaq Stockholm's rule book for issuers.
