Good morning, everyone, and welcome to Humble Group's presentation for the fourth quarter of 2025. My name is Noal 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 sec. 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 humble with stronger operational discipline. The growth during the quarter was mainly driven by our segments 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 a continued focus to optimize inventory levels. Also, I'm very happy to report that our net debt continues down closer to our financial targets.
Johan 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 net sales grew six percent organically during the quarter and this is of course then driven from a strong demand in our mainly in our future stacking and core nutrition segments. Looking for the full year and a quick glance, we grew net sales 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. um but for the quarter we ended up as noah said on 2.1 billion and also worth double clicking on this we 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 and the adjusted EBITDA margin reached 6.5 percent we had a once again mentioned the currency impact had a negative impact of the overall profitability for the quarter with 7 million crowns uh 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 encoded 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 is also that we noted a strong release from the networking capital of 79 million crowns mainly driven by a good release from of our inventory levels which came down and contributed with 86 billion in the quarter and the cash flow from operations of the changing network at working capital amounted to 206 million which would be compared to 132 uh 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 we converted 126 percent of the the cash flow from in relation to ebitda so all in all we are we're very happy with the cash flow in the in the fourth quarter and also looking glancing at the full year yes to to double click on that as well we are happy to to conclude that humble generated over half a billion in cash flow from operations during 2025 that is an increase of 80 percent year on year with that said cash flow and be mindful with the 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, whoops, excuse me, 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 U.S. 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 sec 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 and operating in. Now we see very good opportunity and good possibility to continue drive the leverage further down we do have and want to flag for that we do have some remaining capex investments and in the new confectionary site that the grants in club there of approximately around 70 million during the first half june in 2026 which will have on temporary temporarily impact on the continued delivery delivery 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 juan so let's talk a bit about more about our segments if we start off with the future snacking segment we continue to grow well during the quarter organic growth in the segment reached 21 percent 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 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 U.S. 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 U.K. 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 growth for the quarter. The EBITDA in the segment was also affected by currency effects of minus 5 million sec. Within quality nutrition which is our sport nutrition segment organic growth amounted to 11 percent 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 beta in this segment was also affected negatively by currency effects of minus five million sec sorry two million sec finally we have the nordic distribution segment that grew organically by three percent 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 pre-wab we have also initiated a warehouse relocation to support our future expansion at the same time the consolidation of the platform into one pre-wab 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 Humboldt. After one quarter as acting CEO, my view is clear. Humboldt 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 are 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 are 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.
Thank you, Noel. And during the presentation, we can see that we've had quite good interest and many, many interesting questions coming in, just trying to navigate a little bit through them and take them as we go. We can start with Hans Marius from DNB asking about the, if there are any positive effects from effects going forward as well as on gross margins, strong SEC versus purchases in US dollars. And yes, here we can just in short say we're talking about two different currency effects. When we talk about currency effects in the report, we are talking about mainly the translation effects. Then Hans-Morris, you're asking about the transaction effects. And yes, there is a somewhat positive underlying effect from this, but there is a natural lag from when we do the purchases from when we transfer it through the inventory and can see the positive impact in the P&L going forward. So some positive impact to be expected but we will see when that turns out.
We have one question here regarding the strategic review um in respect for the processes we do not want to share any financial details on how the potential deals might look like what we can say is that we are working on a few potential divestments and as mentioned before our hopes are that we'll be we'll be able to release some news to the market within the upcoming weeks and months there's a question here from let's see in which segment do you see the greatest potential for divestments and acquisitions i would say that in the potential m a deals that we're looking at as our quality nutrition and future snacking segments are growing well and we see that we are good owners of these companies these are segments we are definitely looking at improving and inviting more companies into one short question about this ongoing city ceo recruitment and then whether you want to reply on that very short yes so the board has actively been working on the recruitment process for some time and it's obviously following a structured and thorough approach the progress the process is progressing well and a decision will hopefully be communicated to the market in the near term.
One question from GLG about any measures targeting the inventory and working capital levels going forward and yes of course we do have several different measures that we apply internally working capital in relation to net sales and the working capital ratio is two of them but of course there is many different to apply and the challenge for us of course in terms of when speaking of the working capital is how to to make sure that we have enough inventory to meet the strong demand in our in our underlying segments while being as efficient as possible with the with the capital so that is uh that is the core questions that we balance on a day-to-day
basis uh to to reply on that question yeah and uh noel maybe from victor at dmb kenegi a question about the u.s expansion for swedish candy would you like to elaborate a little bit on that one absolutely so we've launched primarily pandy as our own brand in the u.s where we have received several listings at retailers in the u.s at the same time we're also one of the top performing brands on TikTok Shop. We are also discussing with a few partners of potential private label deals for the US market and at the same time our distribution arm Priva does still get significant inbounds and sales from different retailers both online and offline that are currently selling candy to to the united states so i would say that it's progressing well and our website is is also up and running and performing well so the us is interesting and a market we are focusing on not only with the swedish candy segment but also our true dates so as mentioned earlier on TrueDates have received several significant listings in the US, and less than two weeks ago, we launched at Sam's Club, quite a big listing, where we're very excited to see how the rotation out of store will look like in the coming weeks.
Thank you, Noel. And just one question from GLG here about the other external expenses of other external costs, 40% of sales. uh i wouldn't say yeah all-time high of course perhaps in in absolute measures but uh it's in line with the 14 was the same level uh last year as well and uh year on year we we have a certain percent of other external expenses to to net sales and of course the question about marketing uh marketing costs and marketing spend that's something that we continue monitor monitor closely we have communicated a little bit about it previously but we continue to see and make sure that we spend the money where we think we get the best bank for the buck let's see our short
thoughts on that one that's going through there's a lot of questions today and that's of course very happy to see a good interest for this presentation Noah would you like to share a thought on the cost saving program very short what you think about the progress absolutely so the work started directly in q4 and as mentioned earlier on we are confident that our announced targets will be reached within 2026 when those effects will be visible
um we'll probably see it in q3 of 2026 and moving ahead but we are confident that we will reach the targets that has been announced yeah and also to to tap into that one of course now we've made a the quarter that we've been through has been um we have had high focus to to execute on the reorganization and the efficiency program communicated and then of course, there is a delay from when the full effect is expected to be visible in the financials as well, and especially the full cash flow effect, as we do have a lot of contractual obligations that we are actually paying for as we go right now. But that will be expected to be visible at the mid Q2 and especially going into the third quarter in 2026. See what we have, which more questions we've got here, trying to navigate them through all, bear with us here. One question from Victor at capacity utilization, how is it progressing in your recent capacity investments?
When can we expect satisfying utilization level during second half 2026 is a question from from victor at the end but can you can you maybe know what you want to share what's the what the update of the factory yeah absolutely so we have started the initial installations of the machinery obviously it's always tricky to plan a complete new factory. But with that being said, our target is still to be up and running sometime around the Q3, Q4 period during the year. At the same time, we are working with several retailers, brands, and partners to fill up that capacity. And it's looking very promising, not only for our sugar-free production line, but also for our standard sugar candy.
Thank you, Noel. One question from Viktor at the Mekanega about working capital. Is the structural or seasonal the effect that we saw here in the fourth quarter? And of course, I would say it's a little bit of a mix. Yes, there are some seasonal impacts to our business, but this is also a very high priority area for Humboldt to make sure that we are improving the efficiency with the capital employed quarterly every quarter as we go. uh and also it's very a little challenging to to uh guide on the expectations going forward but we can't what we can say about working capital for 2026 is things seasonal things that do have an impact on us on us is that we have an early easter this year in q1 coming in where the sales are coming in in q1 rather than in in q2 that we had last year that will highly likely be impacting the working capital in the beginning of the year but with that said we continue to monitoring this and and do what we can to optimize inventory levels to to both drive sales but also be efficient with the capital employed. One question from Sergei Suarez at Aguja Capital regarding the outlook for capital expenditure. I think Noel you will reply to that a little bit regarding the capital investment in grants, we expect to have approximately 70 million left to deploy in that project. But besides that, we have the Bars investment in Australia that also is near completion and is not expected to drive that much cash during 2026. Besides that is maintenance complex mainly i would say no new big investments that are planned currently our biggest focus is to make sure that we continue to reduce the overall overall leverage and improve the financial situation uh financial position i would say uh two i think maybe the last two questions um i hope we've covered the most of them if we want to touch a little bit on solent we're mentioning challenging quarter in uk and germany but foremost solent would you want to give a comment on that noel sure so we did lose one distribution contract
at the end of the quarter which affected the sales however it's important to to mention that it's the name of the game you you win some and you lose some but we're at the same time happy to say that solent is still winning new business in the uk however it's important to mention that the contracts that solent work with are usually for the long term we work with very very large retailers which means that if we win a contract today it might be ready to to be released and entered into the store during the summer or in q3 q4 so it takes some time but we we feel that the
team are are on it we work closely with the management team over there and we're seeing good progress in in new deals perfect thank you noel um with that said i think we have covered all the questions or at least the vast majority of them and we are continue working on q1 and a strong delivering a strong 2026 any final remarks from you noel no just as this quarter we will continue to work on delivering strong organic sales the leverage needs to get down and we'll
manage that by improving our own cash flow but also with the potential divestments that we have ahead of us and of course improving the profitability thank you everyone for calling in today I wish you a nice week in the head all the best thank you so much for listening
