Humble Group Ab · OMXSTO:HUMBLE
Humble Group Ab — Investor Presentation (September 2024)
76 slides from Humble Group Ab's investor presentation, September 2024
Slide 1: Company Presentation Q2 2024
Company Presentation Q2 2024
Slide 2: An introduction to Humble
An introduction to Humble HUMBLE GROUP | COMPANY PRESENTATION 2024 2
Slide 3: A modern and entrepreneurial driven FMCG group
A modern and entrepreneurial driven FMCG group On a mission to transform the industry WHAT WE DO We specialize in driving value and accelerating growth in small and mid-sized 7,446 551 FMCG companies MSEK MSEK Net Sales Adjusted EBITA LTM Q2 2024 LTM Q2 2024 82 1,117 Markets Group employees OUR OBJE
Slide 4: The FMCG market is one of the world's largest industries
The FMCG market is one of the world’s largest industries Consumer Packed Goods is a massive portion of the total FMCG market FMCG (Fast-Moving Consumer Goods) Consumer Packaged Goods (CPGs) are are everyday essentials like food, everyday items that come in beverages, and personal care items convenie
Slide 5: The world is changing – the FMCG market is lagging behind
The world is changing – the FMCG market is lagging behind Major global macro trends demand innovation and change HEALTH & WELLNESS Rising demand for healthier products DIGITAL COMMUNICATION SUSTAINABILITY We are committed to be a Expansion of e-commerce, social media, and Increasing need for ethical
Slide 6: Entrepreneurial group fueled by active ownership
Entrepreneurial group fueled by active ownership Decentralized operations with supportive governance, focused on driving value A dynamic network of small to mid-sized enterprises EN N TR O EP TI ing value VA RE riv INNO NEURSHIP D Active in the Consumer Packed Goods segment of the FMCG universe is a
Slide 7: Business Segments
Business Segments A resilient mix that creates opportunities Market access accelerator Product segments FUTURE SUSTAINABLE QUALITY NORDIC SNACKING CARE NUTRITION DISTRIBUTION Leading the transformation Leading Nordic manufacturing Nordic wholesale and distribution Natural brands and dynamic towards
Slide 8: Our history divided into two main phases
Our history divided into two main phases Buy, build, improve Phase 1 Phase 2 Establishment of the platform Integration & consolidation March 2023 Today 2020 Merger between Outlining the Launch of Business Equity raise of 875 Updated Pändy and Bayn Group Business Segments Segments MSEK, bond and bank
Slide 9: The future of Humble
The future of Humble Continuing to expand our FMCG powerhouse Invest in Strategic growth bolt-on assets acquisitions Consolidate and Act on exciting Maintain strong build on platforms opportunities cash flow HUMBLE GROUP | COMPANY PRESENTATION 2024 9
Slide 10: We sell more than just healthier candy and toothbrushes
We sell more than just healthier candy and toothbrushes We can fill an entire hypermarket store with different products +21% +40,000 Increase in # of products Products since 2022 Some examples here to the right, and many, many more… HUMBLE GROUP | COMPANY PRESENTATION 2024 10
Slide 11: A solid B2B partner with renowned brands
A solid B2B partner with renowned brands Legacy of serving some of the leading FMCG companies and retailers A diverse mix of pioneering brands and long-term favorites Branded Sales ▪ Our own brands and trademarked products Contract ▪ Sales from goods produced externally and internally Branded Manufa
Slide 12: Proud owner of future global champions
Proud owner of future global champions Continuing to invest in our most promising brands, exceptional value gain potential Median EV / sales multiple** 1,534 MSEK 43% 96 MSEK 3.7x Net Sales* Gross margin* EBITDA* Precedent transactions Humble hero brands Selected precedent transactions * LTM Q2 2024
Slide 13: A diverse portfolio of legacy brands
A diverse portfolio of legacy brands Historic track-record of successfully managing brands over time HUMBLE GROUP | COMPANY PRESENTATION 2024 13
Slide 14: Global distribution in key markets
Global distribution in key markets Our own people on the ground in 17 countries Persistent relationships with distributors, covering 82 markets Footprint across 5 continents ▪ London ▪ Hampshire ▪ Sheffield ▪ Cheshire ▪ Lisbon ▪ Porto ▪ Trofa ▪ Aveiro +150,000 Point of Sales NET SALES SPLIT BY MARKE
Slide 15: Persistent relations with global retailers
Persistent relations with global retailers Our B2B customer base consists of multinational corporations and local market leaders Sales contribution by customer size Customer categorization 10% Average customer size LTM Q2 2024 growth Top 1 - 15 14% Top 16 - 150 44% 216 MSEK 18% Top 15 customers Top
Slide 16: An industrial platform built for impact
An industrial platform built for impact Several production sites with modern capabilities Established relationships with top-tier contract manufacturers Skövde PRODUCTION SITES Key information: Industrial platform Ljung Total production units 18 Gothenburg Fredriksfors Höganäs Countries 7 Tammisaari
Slide 17: Recent capacity constraints have hindered full growth potential
Recent capacity constraints have hindered full growth potential Investments during previous two years enhances ability to meet strong demand Capacity constraints began in Q2 2023 due to Trend trajectory indicate exceptional growth and lost sales opportunity of Initiatives to increase capacity increa
Slide 18: Market share gained through volume
Market share gained through volume Restrictive pricing will favor us in a down-trading market European FMCG market 2023 Humble development Price / volume mix* Price / volume mix 120% 120% 100% 100% 7% 7% 4% 12% 20% 26% 30% 34% 80% 80% 39% 43% 60% 60% 113% 93% 93% 96% 40% 88% 40% 80% 70% 74% 61% 66%
Slide 19: Engaged entrepreneurs and local management
Engaged entrepreneurs and local management We have some of the most experienced FMCG veterans as shareholders and management <9% of key Former CEO of Trollhättan, Niklas Andersson, takes on the role as CEO for the consolidated Privab unit employees have been succeeded “I’m excited to drive Privab’s
Slide 20: Original structure during active acquisition phase
Original structure during active acquisition phase We haven’t acquired companies just to stack EBITA HUMBLE GROUP PRIIVAB MEDICA CLNICAL THE HUMBLE CO VITERNA SOYA WELLIBITES GO SUPERFOODS SOLENT KRYDDHUSET MARKNADSBOLAG NORD FITNESS LA PRALINE BARS BODY SCIENCE PRIVAB YSTAD GRAHNS AMBER HOUSE MARAB
Slide 21: Progress with our platform strategy, starting to yield results
Progress with our platform strategy, starting to yield results Down from 47 direct reporting units to 26, with more to come HUMBLE GROUP GOLDEN ARENA ARENA GREEN SALES FIRST CLASS SOLENT HERO BRANDS PRIVAB STAND ALONE ATHLETE CONFECTIONARY NUTRITION DISTRIBUTION BRANDS THE HUMBLE GRAHNS BARS PRIVAB
Slide 22: Key takeaways
Key takeaways An introduction to Humble Well-positioned to create Resilient position with diverse Governance model that fits long-term value and portfolio and customer base the market transformation accelerate growth HUMBLE GROUP | COMPANY PRESENTATION 2024 22
Slide 23: Key takeaways
Key takeaways HUMBLE GROUP | COMPANY PRESENTATION 2024 23
Slide 24: 3 layers of synergies depending on the opportunity
3 layers of synergies depending on the opportunity A refined strategy to maximize our engagement in our companies Layer 1: Group level Shared services, procurement and centralizing functions between companies Example: Supporting with the time-consuming tasks such as HR, Finance, legal and business i
Slide 25: 7 key areas form our Value Creation Model
7 key areas form our Value Creation Model The foundation on which we drive value in our companies Strategic framework Trend transformation Supplier leverage Our objective is to make it easier New product development and more fun for entrepreneurs to build companies Distribution leverage Investment r
Slide 26: Strategic framework (1/7)
Strategic framework (1/7) Developing a long-term business plan THE CHALLENGE FOR SMEs Lacking a clear strategy and business infrastructure 3 to 5-year strategic business plan to execute and scale Operational opportunities WHAT ENTREPRENEURS NEED Strategic plan to maximize value potential long-term P
Slide 27: Trend transformation (2/7)
Trend transformation (2/7) Helping our companies capitalize on health transition as % of Net Sales by category THE CHALLENGE FOR SMEs Struggling to identify trends and ensuring seamless execution 53% 50% 57% WHAT ENTREPRENEURS NEED A network of innovators that can provide guidance in executing on th
Slide 28: New product development (3/7)
New product development (3/7) Innovation and investing in product quality The industry Our capability THE CHALLENGE FOR SMEs Time consuming and resource-constrained +2 years <6 months for conventional FMCG companies from idea to development projects to launch new products from ideation product launc
Slide 29: Supplier leverage (4/7)
Supplier leverage (4/7) Ensure the right product to the right price THE CHALLENGE FOR SMEs Finding relevant suppliers and obtaining favorable Internal production terms 18 Production units with WHAT ENTREPRENEURS NEED broad capability A diverse supplier network and minimized production cost External
Slide 30: Distribution leverage (5/7)
Distribution leverage (5/7) Accelerate roll-out in key markets globally THE CHALLENGE FOR SMEs +150,000 Access to Difficult to find the right distribution partner Points of Sales 82 globally markets globally WHAT ENTREPRENEURS NEED 13 Direct access to Distribution in key strategic markets and a part
Slide 31: Investment resources (6/7)
Investment resources (6/7) Unlocking potential with greater resources Bars Production i Gråbo is currently installing their 5th production line, with line 6 ordered, to scale long-term THE CHALLENGE FOR SMEs Entrepreneurs are often limited by capital capacity to execute on value-driven initiatives ~
Slide 32: HQ services (7/7)
HQ services (7/7) Time-consuming areas of any business - ESG integration Sustainability - CO2 accounting - Other compliance and reporting - Accounting & budgeting THE CHALLENGE FOR SMEs Finance - Treasury Manage administrative tasks and at the same time - Tax operate the business - Contract manageme
Slide 33: Power BI: State-of-the-art data platform (7/7)
Power BI: State-of-the-art data platform (7/7) Making our leaders better informed about what is happening in real time DASHBOARDS CUSTOMIZED FINANCIAL REPORTS Valuable SCORECARDS insights for decision- making and control DEEP DIVE CUSTOMERS, SUPPLIER REPORTS MARKETS, PRODUCTS Groupwide coordination
Slide 34: Humble Incubator
Humble Incubator Gathering insights across the Group and driving innovation in a structured process Initiator and executor of new ideas and concepts Branding Marketing strategy Partnership building Leverage from strengths of Value Creation Model Supplier sourcing Product development resources Distri
Slide 35: Key takeaways
Key takeaways Business Strategy The more we learn, the better We have developed a model New product development to we get at driving value in our that enables our companies find the next big thing companies to reach their full potential HUMBLE GROUP | COMPANY PRESENTATION 2024 35
Slide 36: Business Segments: Deep Dive
Business Segments: Deep Dive HUMBLE GROUP | COMPANY PRESENTATION 2024 36
Slide 37: FUTURE SNACKING
FUTURE SNACKING HUMBLE GROUP | CAPITAL MARKETS DAY 2024 37
Slide 38: Introduction to Future Snacking
Introduction to Future Snacking Leading the transformation towards healthier snacks and confectionary 949 ▪ Gummies ▪ Mouth refreshments MSEK Branded ▪ Foam ▪ Spreads Sales, 79% Net Sales ▪ Coated ▪ Jams ▪ Chocolate ▪ Spices and spice mixes ▪ Hard boiled ▪ Bakery ▪ ▪ Caramel Truffles / Pralines ▪ To
Slide 39: Market opportunity in traditional and sugar-reduced confectionary market
Market opportunity in traditional and sugar-reduced confectionary market Global conventional candy market Global sugar-reduced market USD Bn USD Bn 2,3 2,2 298 2,2 268 1,9 240 203 214 1,5 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Conventional candy market Sugar-reduced market Sugar-reduced m
Slide 40: Sugar-reduced has not met consumer expectations
Sugar-reduced has not met consumer expectations Compromising quality and taste for healthier alternatives is no longer an issue Traditional alternatives EUREBA: 1:1 sugar replacement Traditional sugar substitute alternatives are often maltitol based, EUREBA revolutionizes the industry by providing a
Slide 41: Transforming the confectionary market country by country
Transforming the confectionary market country by country Well-established in Sweden – Pändy is poised to accelerate a global market entry Pändy, Wellibites, Tweek, Green Star Successful market entry and quickly becoming the most popular sugar-reduced candy Other “free from” confectionary brands Humb
Slide 42: Arena Confectionary: Local candy manufacturing unit
Arena Confectionary: Local candy manufacturing unit Changing the assortment to high value-add products Q2 2024 Has since changing supplier in 2023 become the largest customer in Grahns 30% Sugar-reduced as % of Net Sales 2020 LTM Q2 2024 2% 20% Leveraging of layer 3 synergies Sugar-reduced as Sugar-
Slide 43: Swedish Candy: A new phenomenon
Swedish Candy A new phenomenon Not just a trend, Swedish Candy is here to stay Swedish candy is taking the world by storm as interest goes viral Production is maxed out to keep up with soaring demand We see this as more than a passing trend - it's a fundamental shift in consumer behavior towards aut
Slide 44: Strategic initiatives – Future Snacking
Strategic initiatives – Future Snacking Specific projects to support underlying segment growth Company or Revenue potential by initiative at full completion # Initiative Type Status Estimated timing Platform MSEK Arena 2nd shift and Franssons Q3 2024 1 Capacity increase 0-24 months Confectionery CAP
Slide 45: SUSTAINABLE CARE
SUSTAINABLE CARE HUMBLE GROUP | COMPANY PRESENTATION 2024 45
Slide 46: Introduction to Sustainable Care
Introduction to Sustainable Care Natural brands and dynamic personal and homecare partner Branded 2,297 ▪ Oral care ▪ Laundry Sales, 41% MSEK ▪ Diapers ▪ Pet care Net Sales ▪ Wet wipes ▪ Air care Distribution, ▪ Hair care ▪ Baby care 15% ▪ Body care ▪ Femcare ▪ ▪ Skin care Cleaning ▪ ▪ Candles Unive
Slide 47: Natural care market outperforming traditional personal care
Natural care market outperforming traditional personal care Exciting exposure with some of our major brands Global natural care market USD Bn* 21,6 20,9 Global natural care 19,6 4.7% 17,2 CAGR 16,5 2019-20231 2,3 bn SEK Humble natural care exposure LTM Q2 2024 2019 2020 2021 2022 2023 HUMBLE GROUP |
Slide 48: High recognition premium brands
High recognition premium brands A challenging last few years, positioned to capitalize on a market bounce back Supply chain disruptions have caused raw material shortages and increased shipping costs, which disproportionately impacted eco-friendly brands Stabilizing economic conditions and a renewed
Slide 49: Full-service provider in personal and home care
Full-service provider in personal and home care Leveraging our own facilities and growing private label distribution Production Distribution / Private Label Solutions Case - sustainable transformation Specialized products including skin, hair, oral and body Specialized in designing, developing, and
Slide 50: Strategic initiatives – Sustainable Care
Strategic initiatives – Sustainable Care Specific projects to support underlying segment growth Company or Revenue potential by initiative at full completion # Initiative Type Status Timing Platform MSEK New product 1 Babblarna Joint venture Q4 2024 3-36 months development New plant- New product 2 N
Slide 51: QUALITY NUTRITION
QUALITY NUTRITION HUMBLE GROUP | COMPANY PRESENTATION 2024 51
Slide 52: Introduction to Quality Nutrition
Introduction to Quality Nutrition Leading Nordic manufacturing and strong sports nutrition brands 1,528 ▪ Powders ▪ EUREBA Branded MSEK ▪ Protein bars ▪ NAVIA Sales, 46% Net Sales ▪ Capsules ▪ Vitamins Distribution, ▪ Tablets ▪ Minerals 3% ▪ Energy drinks ▪ Substitutes ▪ Superfoods Contract Manufact
Slide 53: The sports nutrition market is surging
The sports nutrition market is surging Humble is the leading Nordic contract manufacturer with a vast product range Global sports Nutrition market development USD Bn* Global sports nutrition 44 16.6% CAGR 2019-20231 33 30 20 19 1.5 bn SEK Humble sports nutrition exposure LTM Q2 2024 2019 2020 2021 2
Slide 54: Arena Nutrition
Arena Nutrition Nordic powerhouse in contract manufacturing of sports nutrition Comprehensive offering: Arena Nutrition provides a complete range of high-quality products across key categories in sports nutrition, tailored to Nordic B2B markets Innovation & quality: We drive faster innovation and en
Slide 55: Extensive scaling phase at Bars Production SE
Extensive scaling phase at Bars Production SE Aiming to become a European premium supplier of protein bars Production line 5: Installment in progress to service short-term demand. The line is sold out in capacity Production line 6: Additional line ordered to increase capacity long-term and grow busi
Slide 56: Strategic initiatives – Quality Nutrition
Strategic initiatives – Quality Nutrition Specific projects to support underlying segment growth Company or Revenue potential by initiative at full completion # Initiative Type Status Timing Platform MSEK 2nd shift and 1 Ewalco Capacity increase Shift Q4 2024 3-36 months CAPEX PL dates + 2 Amazing F
Slide 57: NORDIC DISTRIBUTION
NORDIC DISTRIBUTION HUMBLE GROUP | COMPANY PRESENTATION 2024 57
Slide 58: Introduction to Nordic Distribution
Introduction to Nordic Distribution Nordic wholesale and distribution partners, accelerating growth for our brands Logistics 32% 2,671 24% MSEK 22% Net Sales 13% Stock keeping Marketing & concepts 4% 4% 1% Field sales force Account Management 560 MSEK Gross profit 79 MSEK EBITA +185,000 Pallets disp
Slide 59: Distribution Access
Covering all key channels in Sweden Direct access to stores provides an advantage in trying new innovations Grocery trade Specialty trade Discount Fitness / Pharma Distribution Access Warehousing Logistics Distribution Wholesale Retailers RIKSGRÄNS NORGE Fitness ecom/stores End consumer HUMBLE GROUP
Slide 60: A nation-wide wholesaler and logistics partner
A nation-wide wholesaler and logistics partner driving volume growth for our customers HUMBLE GROUP | COMPANY PRESENTATION 2024 60
Slide 61: Consolidation to gain economies of scale
Consolidation to gain economies of scale Centralizing purchasing and functions to gain competitive advantage in the procurement processes Selected Privab customers Consolidated Central logistics Partnership agreement Integrated sales regions RIKSGRÄNS NORGE Health and wellness Pick & Mix concept Con
Slide 62: Strategic growth initiatives – Nordic Distribution
Strategic growth initiatives – Nordic Distribution Specific projects to support underlying segment growth Company or Revenue potential by initiative at full completion # Initiative Type Status Timing Platform MSEK Export pick & 1 Privab Structural Started 0-48 months mix 2 GSD Consolidation Structur
Slide 63: Financials
Financials HUMBLE GROUP | COMPANY PRESENTATION 2024 63
Slide 64: A Capital Allocation Strategy that resonates with our Business Strategy
A Capital Allocation Strategy that resonates with our Business Strategy whilst ensuring we will obtain our financial targets HUMBLE GROUP | COMPANY PRESENTATION 2024 64
Slide 65: Aligning financial targets with our Business Strategy
Overview Aligning financial targets with our Business Strategy OLD TARGET UPDATED TARGET SEK 16 billion in proforma net sales with organic growth of at Average net sales growth of at least 15 percent per year, Growth least 15 percent per year. primarily driven by organic growth. Profitability SEK 19
Slide 66: Historical investments
Capital structure Historical investments target We have continuously invested in CAPEX to Operating cash flow development act on opportunities Highlighting some of the key investments made in Quality Nutrition and Future Snacking. 184 146 154 Quality Nutrition 129 127 138 105 101 ▪ Bars Production i
Slide 67: Capital allocation priorities
Capital structure Capital allocation priorities target Invest in attractive assets and bolt-on acquisitions Growth assets Bolt-on acquisitions to existing platforms Machinery and equipment Investments in new facilities where we want to scale Entrepreneurial driven SMEs Investments to existing factor
Slide 68: Capital structure target
Capital structure Capital structure target target Natural deleveraging through amortization and Improved profitability Leverage development 3,9x 2 083 3,3x OLD TARGET UPDATED TARGET 1 825 1 808 3,1x Net debt in relation to LTM Net debt* in relation to EBITDA adjusted EBITDA < 2.5x 530 545 577 <2.5x
Slide 69: Track-record of stable growth
Net Sales Track-record of stable growth Target Proforma development since 2016 Proforma Net Sales (MSEK) Net Sales growth (inc. Currency) Intragroup elimination of 10% Our companies have a long history of stable growth year have been applied on 7 446 historical figures to reflect 7 106 over year – o
Slide 70: Net Sales growth target
Net Sales Net Sales growth target Target Aligned with our history and Business Strategy Historical underlying CAGR ~14.3% 2019 – LTM Q2 2024 Revenue potential from initiatives by Business Segment OLD TARGET UPDATED TARGET MSEK Average annual Net Sales 16 billion SEK net turnover growth of Proforma b
Slide 71: Gross margin development
Profitability Gross margin development Target Positive momentum since turning point in Q3 2023 Gross margin development Increased internal focus to support our subsidiaries to operate in a challenging macro environment 7 446 7 295 7 049 6 718 Group-wide initiatives starting to show results, and will
Slide 72: Operational cost base
Profitability Operational cost base Target Increased efficiency of resources employed Increased sales & marketing efforts, +40% YTD investing for long-term growth and profitability Overhead development as % of Net Sales 14,8% Other external expenses and personnel costs will not be 14,5% increased at
Slide 73: Profitability target
Profitability Profitability target Target Several operational improvements to significantly improve the profitability margin OLD TARGET UPDATED TARGET ~4.4% EBIT margin LTM Q2 2024 1.9 bn SEK adjusted EBITDA EBIT margin of Continued positive development in gross margin Proforma basis 10% resulting f
Slide 74: Key takeaways
Key takeaways Financials We have invested in our Strategic initiatives and bolt-on Positioned to regain gross companies to prepare them acquisitions will contribute to margin and leverage the for the future the already strong underlying operational cost base growth HUMBLE GROUP | COMPANY PRESENTATIO
Slide 75: KEY TAKEAWAYS
KEY TAKEAWAYS Maximize value Invest cash flow in Execute on Increase Continue to drive extraction from our great opportunities strategic initiatives profitability by transformation companies growing with cost towards healthier control products HUMBLE GROUP | COMPANY PRESENTATION 2024 75
Slide 76: Simon Petrén, Group CEO
SIMON PETRÉN GROUP CEO +46 (0) 70 999 94 55 simon.petren@humblegroup.se HUMBLE GROUP | COMPANY PRESENTATION 2024 76
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