Humble Group AB (publ)

Good morning and welcome to Humble Group's third quarter presentation. My name is Anders Fredriksson and I took over as CEO on September 14th. I'm proud of joining the company and really excited of stepping into this role. But of course, Humble, no pun intended, by the trust given to me. With me today is our CFO, Johan Lennartson.

Good morning everyone.

Johan will take us through cash flow and leverage when we come to those slides and help me answer more detailed financial questions afterwards. As usual you can send in questions throughout the presentation in the chat and we will address them when we come to the end of the presentation. I would like to start with my first weeks and what I will focus on. I have visited a number of companies so far, six to be exact, and what I see throughout the group is strong entrepreneurship and people who are proud of what they build. And that is an asset that we will keep. But I think it's important that every company has clear targets and priorities and we follow up against them. So my three priorities for the first one month are profitability first, We can see that the EBITDA margin in the period rose to 6.4% from 3.7% and the efficiency program is completed. The next steps are to take firmer control over pricing, purchasing and cost discipline in every company. Second, cash conversion. Operating cash flow was 120 against 195 last year and the working capital was absorbed 35 million. In the quarter, that is not something I'm satisfied with, and here is definitely room for improvement. And the third priority is clear, active ownership and focus within the Group. From the turn of the year, two experienced FMCG leaders will join us. Henrik Arvidsson as Chief of Staff and Ludvig Persson as Head of Segment for Future Sacking. that will strengthen our FMCG experience and executive power to support our subsidiaries and drive change within the Group. And we also divested seven businesses this year to reduce complexity and improve focus. Some highlights then on the report, the quarter in brief. The reported EBITDA increased by 83% to 141 million SEK and the EBIT margin was 5.1% up from 1.5%. Net sales grew 5% to 2.2 billion SEK. Breaking that up a little bit, 4% was organic and led primarily by future snacking at 12% and quality nutrition at 14%. Sustainable care declined 2% organically on the week UK consumer sentiment. Come back to that a little bit further on in the report. Gross margin improved to 31.3%. Cash conversion was not satisfactory, as I mentioned before, and we will come back to that. Leverage came down to 2.5 times from 2.8 at the end of June, primarily driven by an improved EBITDA. And looking at the portfolio, BIDA, Vestad, Fensestage and Krudhuset in the quarter, and Marrabo and Assertia Fastigheter after the quarter. I will take you through an EBTA bridge to show where the improvement comes from and a little bit about the underlying EBTA development. The reported EBTA rose by 64 million. Looking at the underlying EBTA, it increased from 128 to 165 million. 27 comes from lower items affecting comparability. I'm breaking that up. Minus 51 million last year was related to the efficiency program and the former CEO. and that compared to this period where we have a minus 24 from divested operations and acquisition related costs so the net from those two is 27 million. The remaining 37 comes from the underlying business basically where the largest contributor in the period is quality nutrition at plus 24. We will go on and look at the gross margin. Looking at the trend, the gross profit grew 8% to 689 million in the period and the gross margin was up 0.9 points to 31.3 compared to last year. I would say mainly from consumer and product mixing, quality nutrition and audit distribution. Gross margin was weighted down by sustainable care, impacted by the customer sentiment, as I mentioned before. Currency added about 9 million to gross margin. Compared to second quarter, the gross margin is slightly lower, 31.3 against 31.7. And EBITDA compared to previous two quarters shows a growth of about 20 million. Yes, we will continue to net sales. Here we see an increase of 5% to 2.2 billion SEK. The 5% is organically, the growth is 4% and currency added another percent on top of that. Acquisitions and divestment in the period basically netted out to zero. The growth comes from quality nutrition and future snacking and audit distribution, where I would say quality nutrition and future snacking are the prime drivers of 14 and 12%. Sustainable care declined organically by 2%, mainly because of weak British consumer sentiment. which has been against us in previous quarters as well. Organic growth is important to us, but it has to be a profitable growth. I'll come back to that when we close the presentation. With that, I hand over to Johan to look at the cash flow and the leverage.