Humble Group AB (publ)

Good morning, everyone, and welcome to Humble Group's presentation for the fourth quarter of 2025. My name is Noel Abdayim, and I'm the acting CEO of Humble Group. With me today, I have our Group CFO, Johan Lennarsson. Good morning, everyone. To everyone calling in, welcome, and thank you for taking the time to be with us today. We will now go ahead and present the results for the fourth quarter. There will be a Q&A at the end of this presentation. So let's walk through the quarter. Our organic sales growth came in at 6%, with revenue exceeding 2.1 billion SEK. Our gross profit was in line with last year, And the quarter also marked an important shift for us as a group, where we have accelerated our transformation efforts with clear priorities to build a more performance-driven Humboldt with stronger operational discipline. The growth during the quarter was mainly driven by our segment's future snacking and quality nutrition, where our brands are growing well, as well as our production business within the sport nutrition sector. We saw smaller growth within our Nordic distribution segment and faced a small negative growth within our sustainable care segment, mainly driven by a volatile market in the UK and Germany. In general, our diversified structure and strong local teams continue to deliver a healthy organic growth on a group level, but there's always more that can be done moving ahead. Cash flow remains to be a key priority for us and we delivered a strong cash generation during the quarter with the continued focus to optimize inventory levels. Also, I'm very happy to report that our net debt continues down closer to our financial targets. U1 will now dig into the numbers.

Thank you, Noel. And looking at the top line, we are, of course, pleased to see that we continue to grow the organic sales development. NetSales grew 6% organically during the quarter. And this is, of course, driven from a strong demand in our, mainly in our future snacking and cold nutrition segments. Looking for the full year and a quick glance, we grew, let's say, organically nearly by 7.5%, which is aligned in the financial targets where we say that the majority of the growth target should be organically driven. But for the quarter we ended up as Noah said on 2.1 billion and also worth double clicking on is we faced a significant currency impact of 87 million crowns in the quarter and in total for the full year of 180 million crowns. Looking at the profitability, the gross profit amounted to 665 million crowns in line with last year. That implied a gross margin of 31.4%. It's a small decrease versus last year but please bear in mind again here we notice a significant currency impact of 33 million crowns negative for the quarter. But looking at the profitability and the EBITDA especially, adjusted EBITDA decreased to 139 million crowns. The adjusted EBITDA margin reached 6.5%. We had once again mentioned the currency impact had a negative impact of the overall profitability for the quarter with 7 million crowns. And apart from the challenges in sustainable care, where we have volatile and tough market conditions in both the UK and the German market, we could see a very positive development and possibly positive contribution on the profitability from our future snacking and quality nutrition segments. But with that said, we repeat that the underlying gross profit is a high key priority for us. And we just need to adapt to the volatile currency environment that we are facing. But it's not just about the profitability. If we turn the page and looking more about the cash generation, we ended the quarter on a cash flow before changing networking capital of 127 million crowns. That is in line with previous year. But more positively, it's also that we noted a strong release from the networking capital of 79 million crowns, mainly driven by a good release of our inventory levels, which came down and contributed with 86 billion in the quarter. The cash flow from operations of the changing networking capital amounted to 206 million. which would be compared to 132 previous year. And also looking at some cash flow metrics as our free cash flow amounted to 167, which is a significant decrease from previous year of 95 million. And then we converted 126% of the cash flow in relation to EBITDA. So all in all, we are very happy with the cash flow in the fourth quarter. And also glancing at the full year, just to double click on that as well, we are happy to conclude that Humble generated over half a billion in cash flow from operations during 2025. That is an increase of 80% year on year. With that said, cash flow and be mindful with the capital employed is a continued high priority for us going forward as well. And as a result of strong underlying cash flow, we saw that we can conclude that the leverage is continuing down, reaching 2.6 times adjusted EBITDA for the quarter and end of the year. Now with that said, we do have a lot of all our debt in Swedish currency and we do have a lot of cash in both US dollars and British sterling. So with that said, we have an exchange rate differences in the cash flow and the cash and bank of 38 million SEK for the year. And we also had a negative impact on the profitability of 19 million, 18 million for the EBITDA for the year. So taking these two effects into account, totaling comprising to 57 million crowns for the full year, the FX adjusted leverage would have decreased down to 2.4 times. So with that said, the FX is challenging for us during the quarter, but we need to adapt to the situation we are working in, operating in. Now, we see a very good opportunity and good possibility to continue to drive the leverage further down. We do have, and I want to flag for that, we do have some remaining Calpex investments in the new confectionery site at the Grans in Skövde of approximately around 70 million during the first half during 2026, which will have a temporary impact on the continued deleveraging. But with that said, we see a good opportunity to continue to strengthen the balance sheet and the overall financial position for Humble during 2026. With that said, now I think it's time to move on to the business segments. And Noel, you're happy to go ahead.

Thank you, Johan. So let's talk a bit more about our segments. If we start off with the future snacking segment, we continue to grow well. During the quarter, the organic growth in the segment reached 21%. And several brands within the segment continue to gain market share through new launches and increased listings. During the quarter, we also started the installation of our new production facility in Skövde. And over time, the new candy production facility is expected to strongly contribute to the segment's future international expansion while strengthening our position on the Swedish market. We have also launched our flavor dates, True Dates, in the US at top retailers such as Sprouts and Sam's Club, which is owned by Walmart. If we move ahead to the sustainable care segment, we had a more challenging quarter with organic net sales declining by 1%. We continue to see a volatile market in the UK and Germany. And our subsidiary Solent, which constitutes a significant part of the segment, performed fundamentally well, although the loss of a distribution contract negatively impacted the growth for the quarter. The EBITDA and the segment was also affected by currency effects of minus 5 million SEK. Within quality nutrition, which is our sport nutrition segment, organic growth amounted to 11%. And we have seen a strong recovery in the production of sport nutrition products. And our assessment is that this positive development will continue into the new year. We have also completed the full integration of our supplement production units. And although this has involved some short-term costs, the long-term efficiency gains are now in place and will strengthen margins and operational performance moving forward. The EBITDA in this segment was also affected negatively by currency effects of minus 5 million SEC. Sorry, 2 million SEC. Finally, we have the Nordic distribution segment that grew organically by 3% during the quarter, with a stable gross margin development. The business continues to contribute significant value through an established distribution model with broad market presence. And this strengthens both our own brands, but also our external partnerships. At Prevab, we have also initiated a warehouse relocation to support our future expansion. At the same time, the consolidation of the platform into one Prevab is progressing according to plan. Together, these new initiatives will strengthen our operational capabilities and position as well to hopefully win more additional contracts within Swedish retailers during the year. Finally, let's look ahead to what's next for Humble. After one quarter as acting CEO, my view is clear. Humble has taken an important step towards a more operational approach where we act more actively as owners and devote more time and effort to our businesses. The efficiency program is progressing according to plan, and we are confident in achieving the communicated cost saving targets. The work to streamline the group through selected strategic initiatives and potential divestments are also underway, and we hope to share some more news within the upcoming months. At the same time, we are also looking at new M&A. We're continuing to work hard to strengthen our financial position and balance sheet, where we are focusing on reducing leverage and maintaining a strong cash flow generation. just as we did during the fourth quarter. The whole team are very excited about the road ahead in shaping the new and improved Humble Group. We're committed to delivering value to all our customers, partners and shareholders. Thank you all for listening in. We will now open up for the Q&A.