Humble Group Ab · OMXSTO:HUMBLE
Humble Group Ab — Debt Investor Presentation (June 2021)
47 slides from Humble Group Ab's debt investor presentation, June 2021
Slide 1: Investor presentation
Investor presentation A NEW FMCG POWERHOUSE | June 2021
Slide 2: Important notice
Important notice IMPORTANT NOTICE Acceptance of limitations: The information in this presentation (the “Material”) is presented by Humble Group AB (publ), reg. no. 556794-4797, (the “Company” and together with its direct and indirect subsidiaries, the “Group”) solely for the recipient’s information
Slide 3: Today’s presenters
Today’s presenters 01 Introduction 02 Business overview 03 Company strategy SIMON PETRÉN 04 Operational and financial update CEO Humble Group PREVIOUS EXPERIENCE: 05 Roundup – Investment Highlights 06 Founder and former CEO of Pändy Foods AB, entrepreneur and investor Transaction background EDUCATIO
Slide 4: Introduction
Introduction 01 4
Slide 5: Humble Group at glance
Humble Group at glance A leading FMCG group in the forefront of functional foods and sustainable products • Humble Group is a Sweden-based FMCG group that supplies cutting edge and healthy sugar reduction and vegan products as well as eco-friendly- and sustainable products for the broader FMCG marke
Slide 6: Humble Group
Humble Group Leading FMCG and foodtech Group set to disrupt the industry HUMBLE GROUP IS A FUTURE-FMCG POWERHOUSE COMMITTED TO ENABLE PRODUCTS AND BRAND POTENTIAL, WITH A FUNDAMENTAL POSITION IN GLOBAL MEGA TRENDS; FUNCTIONAL FOOD, ECO- FRIENDLY AND SUSTAINABILITY, AND VEGAN PRODUCTS VISION MISSION
Slide 7: We must change the way we live
We must change the way we live Humble Group addresses the largest challenges to our society and environment GLOBAL OBESITY, # PERSONS PROCESSED FOODS ARE ● Obesity has nearly tripled worldwide since 1975 due to ONE OF THE LARGEST increased intake of processed foods Trend towards 2025 HEALTH THREATS
Slide 8: Global megatrends are shaping the future of FMCG
Global megatrends are shaping the future of FMCG Environmental concerns, shifting demographics and customer behaviour are drastically changing one of the largest industries ENVIRONMENT & CLIMATE CHANGE DEMOGRAPHICS • Increased environmentally-friendly agenda in politics, business • A new generation
Slide 9: Food industry disruptors have become rock stars over night
Founded 1994 Founded 2009 Oat-based products Plant-based meat products Market capitalisation of USD 17bn Market cap of USD ~9bn Founded 2016 Founded 2013 Sugar-reduced candy High-protein products Acquired by TPG Growth Acquired by Kellogg for USD for USD 360m 600m Food industry disruptors have chang
Slide 10: Business overview
Business overview 02 10
Slide 11: Creating the FMCG powerhouse of tomorrow
Creating the FMCG powerhouse of tomorrow A Group committed to providing consumers innovative, sustainable and healthy products SUSTAINABILITY AND ECO- FRIENDLINESS FOODTECH VEGAN HUMBLE GROUP TODAY THIS IS HOW WE WILL WIN THE GAME Mission driven approach Focus on profitable cash built on health and
Slide 12: Humble DNA and vision
Humble DNA and vision Committed to providing consumers innovative, sustainable and healthy FMCG products GLOBAL FORCES… …ENABLED BY SUCCESS FACTORS HUMAN HEALTH GLOBAL SUSTAINABILITY INNOVATION ENTREPRENEURSHIP Reduces the risk of obesity, Focus on ensuring a sustainable Challenge, innovate and deve
Slide 13: Driven and committed management team
Driven and committed management team Highly experienced board of directors with strategic support from senior advisors EXECUTIVE STRATEGIC MANAGEMENT SUPPORT SIMON PETRÉN NOEL ABDAYEM PATRIK EDSTRÖM JOHAN LENNARTSSON MARCUS STENKIL JÖRGEN LARSSON HÅKAN ROOS CEO VP, COO Brands and COO Manufacturing C
Slide 14: M&A journey – the creation of the Humble Group
M&A journey – the creation of the Humble Group Swift transformation with 18+ acquisitions completed last 18 months Change of the strategic direction for the Group A Group positioned for the future of FMCG February June August September November November February April June 2009 2020 2020 2020 2020 2
Slide 15: Value-add throughout the entire value chain
Value-add throughout the entire value chain Targets verticals across the FMCG value chain in order to benefit from a swift and profitable go-to-market process HUMBLE GROUP’S M&A STRATEGY Target verticals Developers of high-tech Large value-add enables sweetening alternatives can high marketing spend
Slide 16: Humble Group operational platform
Humble Group operational platform A FMCG powerhouse that controls and optimise the entire value chain whilst exploiting tangible synergies MARKETING DISTRIBUTION ENTREPRENEURSHIP PURCHASING TECHNOLOGY MANUFACTURING AND SALES NETWORK Decentralised Strong purchasing and Share recipes and scale on Shar
Slide 17: This is our foodtech business area
This is our foodtech business area Market leading consolidator within functional foods WHAT WE DO BENEFITS OF CONSOLIDATING THE FUNCTIONAL FOOD INDUSTRY Produces and distributes functional food and “Better-for-you” products including sugar- and calorie reduced, vegan and vitamin enriched products
Slide 18: This is our eco business area
This is our eco business area Industry disruptor with a mission to induce a more sustainable living WHAT WE DO CASE STUDY: THE HUMBLE CO. Develop and distribute sustainable, natural and eco-friendly products ● A high-growth eco-friendly oral care brand targeting millennial consumers with a unique
Slide 19: Health and eco-friendly are high margin products
Health and eco-friendly are high margin products Humble Groups’s products are marketed as premium products compared to traditional low-cost products ILLUSTRATIVE RELATIVE VALUE-ADD OF HEALTHY ALTERNATIVES AND SUSTAINABLE PRODUCTS PROFIT ATTRIBUTED TO TRADITIONAL CANDY MANUFACTURER PROFIT ATTRIBUTED
Slide 20: Data driven sales strategy
Data driven sales strategy Agile go-to-market strategy with initial listings at all key channel partners and significant remaining whitespace OVERVIEW OF SALES CHANNELS CUSTOMER GROUPS – HUMBLE CO. EXAMPLE Selected Customer group Description customers Most targeted channel representing nearly ~75% M
Slide 21: Humble Smile Foundation
Humble Smile Foundation Our own non-profit organization to give back to children in need 50+ 100,000+ 20+ 56 198 1 million+ Projects worldwide Children helped Partner universities and Partner organizations Volunteers from around Toothbrushes donated professional associations worldwide the world OVER
Slide 22: Company strategy
Company strategy 03 22
Slide 23: Fragmented market ripe for consolidation
Fragmented market ripe for consolidation Market characterised by entrepreneurial driven consolidation and a desire to join our journey VAST UNIVERSE OF POTENTIAL TARGETS M&A STRATEGY AND INVESTMENT CRITERIA Entrepreneurship at heart and a desire to join our journey Continuously evaluate opportun
Slide 24: M&A sourcing through dense network
M&A sourcing through dense network The Group forms a robust platform for future acquisitions DRIVEN AND EXPERIENCED M&A FUNDAMENTAL MANAGEMENT ACCELERATOR GREEN PROFILE Continue to build a founder-lead Group Leverage an autonomous group Leverage a profiled eco-friendly and with a strong entrep
Slide 25: Unique market position
Unique market position Unique position to leverage on our technology core and swift go-to-market process through coverage of the entire value chain Humble targets future FMCG-companies, of which many are too small and which do not fit practically and ILLUSTRATIVE emotionally with the business models
Slide 26: Operational and financial update
Operational and financial update 04 26
Slide 27: Proven access to equity capital and backed by highly reputable investors
Proven access to equity capital and backed by highly reputable investors A healthy balance sheet from recent equity issues allows us to continue our growth journey 35 Selected equity investors SEK +500m in directed share issue RoosGruppen 30 Fjärde AP-Fonder SEK 3.9bn in market Creades cap1 DNB Asse
Slide 28: Active acquisitions
Active acquisitions Strengthening the Group with 7 complementary acquisitions RECENT ACQUISITION NATY FANCYSTAGE WELLIBITES EWALCO MARABU BESON & NORDFOOD COMBINED BUSINESS AREA / BUSINESS AREA / BUSINESS AREA / BUSINESS AREA / BUSINESS AREA / BUSINESS AREA / • Strengthen the VERTICAL VERTICAL VERTI
Slide 29: Naty – A market leader in biodegradable products
Naty – A market leader in biodegradable products The global leader in ECO products OVERVIEW OF NATY ACQUISITION RATIONALE • Naty was started in 1994 and is today the leading ECO brand globally with Market leader in compostable products with strong brand the highest eco certificates possible Prov
Slide 30: Fancystage – Geographical expansion
Fancystage – Geographical expansion A European leader in personal care and cosmetics products FANCYSTAGE ACQUISITION RATIONALE • Fancystage is a European leading skin & body care cosmetics products, Substantial production facility with large production capacity, creating synergies including skin c
Slide 31: Financial trading
Financial trading Significant financial contribution from the Q2 2021 acquisitions NET REVENUE, PRO FORMA, SEKM +152% • Humble Group’s journey throughout 2020 and the 1 847 beginning of 2021 has consisted of several sizable acquisitions, contributing to a significant growth in 1 114 net revenue and
Slide 32: Historical financials acquisitions
Historical financials acquisitions Strong organic growth and profitability during the last 5 years HISTORICAL REVENUE (PRO FORMA) ADJ. EBITDA (PRO FORMA) REPORTED EBITDA (PRO FORMA) • Illustrative pro forma figures for the new 1,858 196 Group as if it would have existed in its 1 900 241 250 200 1,79
Slide 33: Illustrative cash flow for the new Group
Illustrative cash flow for the new Group ILLUSTRATIVE CASH FLOW, PRO FORMA, SEKM 229 • Management estimate net working capital (NWC) to -10 account for circa 15% of adj. EBITDA -10 ~75% cash − Management expects improvement in NWC conversion profile following new cash pool arrangement with -34 overd
Slide 34: Financial position
Financial position FINANCIAL POSITION, PRO FORMA, SEKM • In April 2021 conducted a directed share issue of -249 SEK 502m to fund future acquisitions, leaving a total 502 cash position of some SEK 650m following the -164 229 transaction 147 -107 • SEK 249m has been used to finance a deferred 700 paym
Slide 35: Medium term financial targets and dividend policy
Medium term financial targets and dividend policy Net sales ● The ambition is to achieve a sharp increase in sales in the coming years, driven by organic 23% achieved growth and acquisitions 8 000 ● The Company's ambition is to achieve an average organic growth of at least 10 percent per year ● Reac
Slide 36: Roundup – Investment highlights
Roundup – Investment highlights 05 36
Slide 37: Investment highlights
Investment highlights RIDING ON GLOBAL MEGA TRENDS – HEALTH AND SUSTAINABILITY Optimally positioned to benefit from global megatrends and capture shifting demographics and consumer preferences UNIQUE POSITION – FOODTECH, ECO AND VEGAN Uniquely positioned to benefit from tangible synergies and scalab
Slide 38: Transaction background
Transaction background 06 38
Slide 39: Transaction background
Transaction background THE CONTEMPLATED TRANSACTION IN BRIEF SIMPLIFIED FINANCING STRUCTURE On 5 January 2021, Humble Group AB (publ) (“Humble Group”, the “Company”, the “Issuer” or the “Group”) issued SEK-denominated senior secured fixed rate bonds under a framework amount of SEK 500m with final
Slide 40: Summary of indicative terms for new bond
Summary of indicative terms for new bond Issuer Humble Group AB (publ) Initial issue volume Max. SEK 700m (under a SEK 1,500m framework) Tenor 4 years Coupon Floating rate, 3m Stibor + [●]bps (Stibor floor at zero) Status Senior secured Security Pledge over shares in current and future material grou
Slide 41: Proposed amendment to the terms of the Existing Bonds
Proposed amendment to the terms of the Existing Bonds Summary of existing terms Proposed amendments Issuer Humble Group AB (publ) - Outstanding nominal amount SEK 300m - Framework amount SEK 500m, of which SEK 200m available for subsequent issues - Maturity date 5 January 2024 - Coupon Fixed rate of
Slide 42: Risk factors
Risk factors 07 42
Slide 43: Risk factors
Risk factors Investing in the bonds (the “Bonds”) involves a set of inherent risks. In this section, a number of risk factors are illustrated, including risks pertaining to Humble Group AB (publ) (the “Issuer” or the “Company”) and its subsidiaries (jointly the “Group” and individually a “Group Comp
Slide 44: Risk factors
Risk factors Further, any co-operation partner or other business partner of the Group may have different approaches with respect to co-operations or joint ventures and if the Group is unable to reach agreement with such partner, the Group may fail to operate the business successfully or even exit th
Slide 45: Risk factors
Risk factors The Group is targeting the Irish and UK market, where food producers have evolved in the development of reducing sugar in comparison to rest of Europe. Due to the uncertain future of trade between the EU and the UK following the UK’s departure from the EU, as well as legal and regulator
Slide 46: Risk factors
Risk factors II. Legal and regulatory risks Legal and regulatory challenges and changes Selling food for human consumption and products for personal care involves inherent legal and other risks, and there is increasing governmental scrutiny of and public awareness regarding food safety in particular
Slide 47: Risk factors
Risk factors III. Financial risks Financing risk The Group is currently in an expansion phase, and may in the future require additional financial resources for such expansion, which may include costs for, inter alia, acquisitions, research and development, manufacturing and supply, as well as market
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