Humble Group (HUMBLE) Q3 2024 earnings summary

Executive summary

• Net sales grew 9% year-over-year in Q3 to just under SEK 2 billion, with organic growth of 10.3%.

• Adjusted EBITA increased 11% to MSEK 154, and profit after tax improved to MSEK 27 from a loss of MSEK -91.

• Achieved strong cash generation despite inventory tie-up and completed a successful listing change to Nasdaq Stockholm main market.

• High demand persisted across segments, with new distribution agreements and international expansion initiatives.

• Focused on deleveraging towards a target of below 2.5x EBITDA and well-prepared for Q4 and 2025.

Financial highlights

• Q3 gross margin improved to 31%, up 1.5 percentage points quarter-on-quarter, with gross profit up 15% to MSEK 608.

• Adjusted EBITDA margin reached 7.8% for the quarter, and adjusted EBITA for the nine months rose 17% to MSEK 422.

• Cash flow from operating activities was SEK 142 million in Q3; cash flow before change in working capital was SEK 119 million.

• Net debt/Adjusted EBITDA reduced to 2.9x from 3.3x at year-end 2023.

• Earnings per share before and after dilution were SEK 0.06 in Q3 and SEK 0.18 for nine months.

Outlook and guidance

• Q4 is expected to be the most important sales quarter, with a positive start and strong comparative figures.

• Management targets continued growth, profitability improvement, and platform development for 2025.

• New medium-term targets: average net sales growth of at least 15% per year, EBIT margin of at least 10%, and net debt/EBITDA not exceeding 2.5x.

• Investments in 2024 will not need to be scaled at the same level in 2025.

• Emphasis on maintaining cost control while investing for growth and improving gross margin.