Humble Group Aktie

Good morning, everyone, and welcome to Humble Group's presentation for the second quarter of the year. My name is Noel Abdayem, and I'm the acting CEO of Humble Group. With me today, I have our Group CFO, Johan Lennartsson.

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 second quarter. Following the presentation, we will open up for a Q&A session. Let's walk through the quarter. Revenue came in at just over SEK 2 billion, corresponding to an organic growth of 1%. While this is below the level of organic growth you are used to seeing from Humble, we remain confident in our ability to return to stronger growth as the underlying business continues to develop and the initiatives we have implemented gain further traction.

The quarter was impacted by a continued challenging macro environment, together with short-term operational disruptions and delayed deliveries in some of our largest businesses. However, thanks to our diversified portfolio, demand across the group remained stable and helped limit the overall impact. Operationally, we continue to execute on the initiatives launched over the past year.

Our cost efficiency program is progressing according to plan and several of our businesses continue to strengthen their underlying profitability, even though the group's overall earnings were held back by challenges in our distribution business, Privab, and parts of our U.K. operations. We also continue to optimize our portfolio during the quarter. We completed the acquisition of Jutexpo, strengthening our position in the U.K. And after the end of the quarter, we announced the divestment of Fancystage as another step in focusing the group on our highest priority businesses. As part of this work, we recognized a goodwill impairment, which better reflects our future portfolio and long-term strategic direction. While this impacts the reported accounting result, it has no impact on cash flow and supports our ambition to build a more focused, profitable and scalable Humble Group. With that, I'll hand over to Johan, who will take you through the financials in more detail.

Thank you, Noel, for that. And just as Noel said, the net sales came in on just about [ SEK 2 billion ]. We noted a total growth of 1%, which [indiscernible] comprised organic growth. And as Noel said, that's a little bit lower than we are used to see. There was some things to consider regarding the organic growth. First of all, we had a really strong year last year where we had an Easter impact who was contributing positively last year, which we had an early this year. That's mainly visible in the Nordic Distribution segment. But as Noel said, we've also seen challenging market conditions in the United Kingdom, where -- which is one of our largest geographical markets. And that's especially driven by a little bit weaker consumer sentiment and where we see a shift in the shopper behavior. But despite that, we are holding up quite well. We have also completed and announced a few acquisitions and divestments during the quarter. But all in all, the total impact from this M&A activity is limited in relation to net sales. We can see that the acquisitions and the divestment is contributing positively to the profit.

Talking about the profit, the gross profit amounted to SEK 636 million, corresponding to a gross margin of 31.7%. And we can see and we can conclude that the broader portfolio that we have is supporting strength in a challenging time. the gross margin is flat versus last year. And we want to just emphasize that the macro environment has been quite volatile over the beginning of the year, not to mention the Irani-U.S. conflict, which has contributed to an increased prices in our last mile transports from the ports to warehouses, which is heavily dependent on the fuel prices, which has been a volatile income factor in the quarter. But we've also seen -- we also -- we mentioned in the CEO letter that we've seen some supply chain disruptions, which also impacting us negatively, mainly a little bit difficulties with port congestions, which makes it a little bit challenging for our teams to manage the supply chain and the logistics to ensure just-in-time logistics. But with that said, the EBITDA came in on SEK 120 million, and that's in line with last year. And worth mentioning about the EBITDA is that we had a positive gain of SEK 6 million from divestment of subsidiaries in April, but we've also had a negative impact of acquisition-related expenses and revaluation of earn-outs of SEK 8 million -- minus SEK 8 million. So the total impact to EBITDA is negatively, minus SEK 2 million. And also, we want to just remember or bear in mind that we have moved away from reporting the adjusted profitability as a KPI as the core purpose with that is to make it more clear what the underlying profitability is actually generating. So that's why we are highlighting these impacts in this way. But overall, the main challenge for our subsidiaries during the quarter has been fighting the cost price increases due to the volatile macro environment. And with that said, we are not happy with the underlying profitability development, and that's something that we're continuously working with, but we remain at flat versus last year when the macro situation has changed, and that's something that is worth bearing in mind. Noel also mentioned that we've recognized an impairment of goodwill in the Sustainable Care segment later -- earlier this week of SEK 600 million, which has a negative impact to EBIT, but it's a noncash impacting item and also nonrecurring.

But with that said, we are continuously following the valuation of the segments, and we want to be clear that we do not foresee any other need or any future need for impairment goodwill in any of the other segments in the near future. Moving on to the cash flow. We can conclude that the cash flow before change in net working capital came in really strong of SEK 142 million. That is an increase from SEK 129 million in previous year. But however, we can also conclude that we have a seasonality impact in the -- mainly in the inventory, where we build up quite a lot of stock before summer when we do a lot of maintenance in our production sites. So that is contributing to inventory buildup just before summer. And we can also see that the early Easter impacted sales a little bit negatively, but that also was a little bit weaker than expected when it comes to the sell-out from the inventory, which has a negative impact in the second quarter. Moving on to the leverage. It's also, of course, highly dependent on the cash generation in the quarter. And here, we can see that leverage came in on just 2.8x adjusted EBITDA. That is an increase from the first quarter and it's a little bit higher than we want it to be. Now with that said, it's mainly explained by the seasonality impact that we've just spoken about in the net working capital.

But also, we want to emphasize that we've seen this, and we've been aware of this increase in quite a long time as it is a result from strategic decisions in CapEx investments, mainly in the brand new confectionery site, which is very valuable for us to enable future growth and value addition activities in that segment. But we have also completed acquisitions during the quarter, which also have a negative impact of the leverage in the short term, but that we are confident that we will contribute to the overall long-term value creation for the group. Now with that said, we are looking forward to continue working with the leverage, and we are confident that there is much more to do in the third and the fourth quarter to continue to driving that down to the target of 2.5 or even below where we want it to be.

Thank you, Johan. Let's talk a bit more about our 4 business segments. Our segment Future Snacking continued to develop well during the quarter, delivering 7% organic growth despite temporary supply chain disruptions. Demand remained resilient across the segments and momentum improved towards quarter end.

We are also approaching the production start of our new confectionery factory in Skövde, which will significantly expand our manufacturing capacity and support future growth within the segment. Finally, we are very excited about our long-term partnership with the brand Barebells, further validating both our innovation capacities and production platform. Within Sustainable Care, market conditions in the U.K. remained weak and continue to impact both sales and profitability. During the quarter, however, we completed the acquisition of Jutexpo, broadening [ Poland's ] customer offering and strengthening the platform for future growth. Following the quarter, we also divested Fancystage as part of our strategic review and as mentioned earlier, recognized a noncash impairment that better reflects the future composition of the portfolio. We remain confident that the actions taken over the past year position the segment well for improved performance going forward. Moving to Quality & Nutrition.

The segment delivered another solid quarter with 5% organic growth, supported by strong customer demand and high capacity utilization across our manufacturing operations. Profitability was, however, impacted by continued volatility in the whey protein prices, together with temporary operational disruptions. Despite these short-term headwinds, the underlying business remains strong, providing a solid foundation for continued profitable growth. Finally, Nordic Distribution delivered a resilient quarter. While the organic growth was slightly negative due to tough comparables, profitability improved through a stronger product mix. Privab continues to be our main focus, where restructuring initiatives and cost reductions remain well underway. We expect these actions to gradually strengthen both profitability and cash generation moving forward. Finally, let me conclude by looking at our key focus areas going forward. Our highest priority remains the same: to improve profitability and strengthen cash generation across the group. The cost efficiency program continues to deliver according to plan, and we remain focused on operational excellence, pricing initiatives and restoring performance in the businesses that have been affected by temporary market conditions and supply chain disruptions. At the same time, we continue to execute our strategic review.

Our ambition is clear. We want to build a more focused, profitable and scalable humble Group by allocating capital and management attention to the businesses where we see the greatest long-term potential. We, therefore, continue to evaluate both selective divestments and complementary acquisitions. We also continue to invest in strategic growth initiatives. The new confectionery factory in [ Skövde ] will be an important platform for future growth. And at the same time, improving cash conversion and gradually reducing leverage remains the absolute highest priority. Looking ahead, Humble Group is stronger today than it was a year ago. We have a more focused portfolio, a stronger financial platform and a clear strategic direction. Everything we do is aimed at building a stronger business and creating sustainable shareholder value over time. As previously announced, Anders Fredriksson will join as CEO in September.

I am convinced that his extensive FMCG experience will be a great asset as Humble enters its next phase of development. Personally, I look forward to continuing to support the business in an operational role while remaining a long-term shareholder and member of the Board. Over the past year, we have laid the foundation for the next chapter of Humble Group. While there is still work to do, I'm confident that we are moving in the right direction, and I firmly believe that the best is still ahead of us. Thank you all for listening in. We will now open up the floor for questions.

Thank you, Noel, and we will see -- we'll start with the questions as they come and as we go. Let's see what we have. Maybe first here from Hans Mähler at DNB. Noel, can you talk a bit about your expectations of organic growth throughout the rest of the year? Do you consider Q2 a blip in the curve? And what can you say about the potential in Barebells cooperation?

So we continue to see a stable underlying demand across most of our businesses, which, in my opinion, reflects the strength of our diversified portfolio. Several of the factors that affected growth of this quarter are operational rather than structural, and we have clear initiatives in place to address them. Combined with the investments that we're doing, such as our new confectionery factory, we remain confident that we will be able to return to a stronger organic growth over time. When it comes to the partnership with Barebells, we're not commenting on the commercial details, but we see this as a very, very strong validation of the platform that we have built. We believe that Humble has established one of the world's leading platforms for sugar-reduced confectionery, where we combine innovation, product development and what we believe is the highest product quality currently available in the market. And I also believe that, that was one of the key reasons why Barebells chose to partner with us.

And looking at it from a strategic perspective, it's also a great collaborational fit for us. Barebells is currently one of the fastest-growing brands in the U.S., and we hope that this partnership will contribute to building volume and selling capacity in our confectionery over time.

Thank you, Noel. Next question from Hans Mähler here is deleveraging is still moving quite slowly. What are your expectations for cash flow and deleveraging going forward, both organically and through further divestments? Yes. First of all, we can just conclude that we were aware that we would have a negative impact to the leverage overall in the second quarter due to the CapEx investments that we have decided on previously, and we are now moving into the final phase of completing that factory buildup. With that said, we expect to have another quarter in Q3 where we have quite heavy CapEx for that project. But with that said, we are -- we're done more or less now with all the payment of earnouts, and we don't have any other larger initiatives that we expect to have a negative impact on the overall leverage.

That's what we can say. So -- and we are -- with that said, we are confident that we have a good possibility to continue to reduce the leverage during the third and the fourth quarter, and that is one of our highest priorities to achieve. And then another question here from [ GLG ] regarding M&A. Are there any pending significant processes that you aim to conclude during the year? Or are any divestments going forward likely to go more similar to the recent ones with regards to size? Noel, do you have any comments?

Yes. So we continue to execute on the strategic review. And as part of this process, we continuously evaluate both potential divestments and acquisitions. As a policy, however, we do not comment on ongoing processes or potential transactions until they have been completed and publicly announced.

Thank you, Noel. Another question here from [ Jacob ]. Why did Humble divest Fancystage? And will you continue to divest businesses?

So the divestment is once again part of the strategic review that we initiated a year ago. And our objective is to further focus the group, improve capital allocation and concentrate our resources on the businesses where the greatest strategic importance is in place. When it comes to Fancystage, we weren't satisfied with the business development over the past years, which is why we took the decisive action and decided to divest the company.

Thank you, Noel. Another question from [ GLG ]. What operational role will you, Noel, enter into in addition to your Board position?

So on top of me being part of the Board, I am currently in a close dialogue with both the Board and Anders, who's stepping in as CEO to how my final role will be developed, but I will remain highly part of the business, probably out of the commercial side of the group, but we'll announce that when we have a clearer picture of how the future looks.

Thank you, Noel. Let's moving forward here, another question from Hans Mähler. What are the dynamics behind the much weaker Sustainable Care performance in Q2 versus Q1 in terms of year-on-year organic growth? Mainly, it's the main reason where we see a challenge in Sustainable Care is the largest region for that segment is the United Kingdom, where we have some of our largest companies as well. What we can see is also that they lost a quite important contract last year, which have a negative impact on the overall organic development this year.

That's one of the explanations, but also the core explanation is that we have a little bit weaker market sentiment and consumer sentiment in the United Kingdom at the moment, which is -- which we are confident we have a strong team that are there to mitigate impact from. But nevertheless, we cannot not consider what markets we are operating at. Maybe one question from [ GLG ] here. Do you have any broader cost efficiency programs ongoing? Or are you mostly in fine-tuning now?

So obviously, we're working hard on the previous cost efficiency program that was announced a year ago. But with that being said, there's always more that can be done. And as a main priority, we want to get the profitability up across the group within every single business that we own. So that will be the long-term fine-tuning that will continue to happen quarter-by-quarter.

Thank you, Noel. And another question from [ GLG ]. What will the running CapEx level be in Q4? And we can just refer to what we have communicated previously. We usually have a maintenance level for all our production facilities of around SEK 15 million to SEK 20 million per quarter. With that, in the fourth quarter, we do not foresee that we will have any major significant CapEx initiatives that we have had in the past 12 months.

Perfect. I think we covered most of the questions. Thanks a lot for calling in on this call, and we wish you all a great day and weekend ahead.

Thank you so much for listening in.

Good morning, everyone, and welcome to Humble Group's presentation for the first quarter of the year. My name is Noel Abdayem, and I'm the acting CEO of Humble Group. With me today, I have our Group CFO, Johan Lennartsson.

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 first quarter. Following the presentation, we will open up for a Q&A session.

Let's walk through the quarter. Our organic sales growth came in at 8%, with revenue coming in at nearly SEK 2 billion. Despite the challenging macro environment, we are seeing a stable demand for our products. This clearly reflects the strength of our portfolio and our ability to consistently meet consumer needs over time.

All of our 4 segments grew well, and the main growth was driven by our segments, Future Snacking and Quality Nutrition, where our brands and production sites are performing well with a good demand across the segments.

Our gross profit came in slightly lower than last year, mainly impacted negatively by currency effects and the product mix around the group. Cash flow remains to be a priority for us, and we delivered a strong cash generation during the quarter.

Our net debt has continued down, and we are now in line with our financial target of 2.5x adjusted EBITDA. This means that we can gradually shift our focus from a more defensive approach to a more targeted capital allocation strategy.

I am certain that our organically generated cash flows will enable us to drive Humble toward increased shareholder value over time. Johan will now dig into the numbers.

Thank you, Noel. And looking at our net sales, it came in to, as Noel mentioned, to nearly SEK 2 billion, and there is no doubt there is a strong demand for our products in the group.

The organic growth amounted to 8% for the quarter, mainly driven by Future Snacking and Quality Nutrition, where we see a really strong performance for the quarter. And if we start looking about the impact of currencies, we do have a large portion of our business in both U.K. and in Australia, where the impact of stronger SEK in relation to the sterling and Australian dollar is impacting the overall sales development in a negative way.

We also communicated divestments during the quarter and a few acquisitions, and these had in the net effects for the total net sales had a minor impact of negative -- minus SEK 4 million. But overall development for the sales in the quarter is positive, and we see a good demand for our products.

So shifting our focus to the profitability of the group and starting with the gross profit. Gross profit came in on SEK 630 million for the quarter. That is an increase with SEK 15 million. The gross margin amounted to 31.6%. That is a decline from the previous year by 0.7 percentage where -- of which 0.2% is driven by currency impact.

But the major explanation and reason for the decline in the gross margin quarter-on-quarter is driven by product mix and mainly which segment is growing faster. And we see that we have a strong growth in Quality Nutrition this quarter, which had a negative impact on the overall gross margin.

Looking at the overall profitability and in particular, the EBITDA, it improved to SEK 116 million. That is only SEK 1 million up from previous quarter, but we want to underline that we have an underlying profitability improvement, and we will deep dive a little bit what we mean with that.

First of all, we announced the efficiency program in Q3 last year, and we see that we have a good impact from that in the profitability. The efficiency program contributes with approximately SEK 20 million in the quarter. But then as we have communicated as well, we have a currency impact of SEK 6 million and also a loss in the divestment when we divested LEV stores, the stores in the LEV Group. We had a capital loss of SEK 6 million in the quarter, which is impacting negatively, of course.

Then we also have a volatile macro climate, which many of you are aware of. During the quarter, with turbulent situation in Iran, which impacting the energy prices somewhat and also impacts the overall profitability.

So with that said, that has a negative impact to the overall profitability. But with that said, we also want to emphasize 2 major drainers to the profitability in the quarter, which is Privab, where we see an increased price pressure and competition in the market, but where we're also taking bigger and larger investments for this big company in the group to ensure and enable future growth, of which we optimize the warehouse and also invest in the organization to prepare them for the next step in their growth journey.

And secondly, we also see that Solent is regaining some of the challenges they've had in the past from a loss of a customer contract and also somewhat challenging market conditions in the U.K. So that has -- these 2 has a negative impact to the quarter.

But with that said, we do have a strong underlying organic development of the profitability, which we are happy to see that we are moving in the right direction. We also want to say that looking at the segment presentation, we have had a changed procedure of how we present and how we allocate management fee internally between the quarters.

Previously, we have done that allocation semi-annually every 6 months. But now we changed that presentation to every quarterly instead, which have an impact on the EBITDA and EBIT presentation for the segments. And the full impact is disclosed in the -- on the segment slides in the this presentation and also in the interim report that we present on our web page.

Shifting focus to the cash flow. We are happy to see that the cash flow is developing in a profitable and strong way. Cash flow from operation -- operating activities after change in net working capital amounted to SEK 114 million. That is an increase from last year with 63%.

And worth mentioning here is also we do increase that number even though we pay SEK 18 million more in corporate income tax this quarter than we did last year. But if we look at the cash conversion, we increased that number as well from 46% to 73% which is, of course, something we are happy with.

Also worth mentioning is that this quarter, we had a repayment of tax deferrals of SEK 44 million, impacting that number a little bit negatively. But all in all, we see that the cash flow is gaining strength and improving from previous year, and that remains to be a high priority for us here at Humble Group.

And just continuing on the cash flow, we could see that the positive cash flow had a good impact on our overall net debt leverage ratio, which came down to 2.5x. And we are now also in line with the group financial targets that we've communicated previously.

With that said, we have, during the quarter, invested -- continued the plan -- CapEx plan to invest in a new candy production facility in Skovde and also the bar -- second bar production line in Australia.

And those 2 investments had an impact of SEK 41 million during the quarter, and that had a negative impact to the overall leverage with 0.1x. So with that said, we see that we are moving in the right direction in the leverage ratio, but we are also continuing to be mindful with the capital allocation of the group going forward.

But knowing that we have reached the financial targets also gives us the ability to start taking a little bit more offensive approach with how we can allocate the capital across the group. And lastly, I also want to mention and double-click on that, we yesterday communicated a new facility agreement with our 2 main banks and 2 leading banks, SEB and Nordea.

This is a refinancing of the existing facilities, and it gives us an increased flexibility in our business and simplifies our day-to-day lives. It also has a significant reduction on the total cost of financing for the group. So that is something that we are very happy to be able to communicate and which gives us the right support to build the group in the future.

Thanks a lot, Johan. Let's talk a bit more about our segments. If we start off with the Future Snacking segment, it continued to grow well during the quarter, where organic growth in the segment reached 11%.

We have several brands within the segment that continue to gain market share through new launches and increased listings all over the world. Our confectionery production also continues to deliver strong performance. And as mentioned before, we are progressing well with the completion of our new factory in Skovde, while we are actively building the order book for the facility.

We're securing solid production agreements ahead of the opening in the second half of the year and are finalizing dialogues with larger customers and brands regarding upcoming launches, not only in Sweden, but also internationally. The segment delivered a satisfying EBITDA development during the quarter as well, which we are very happy about.

If we look at our segment Sustainable Care, we delivered an organic growth of 2% during the quarter. It's not really where we want it to be, but we're working actively on it. Profitability in the segment remains challenged, primarily as Solent, our company in the U.K., continues to recover from a demanding market environment where the effects of a lost customer contract have not yet been fully mitigated.

After the end of the first quarter, we completed a bolt-on acquisition to Solent's existing platform, Jutexpo, which we expect will support the recovery and help us accelerate the growth going forward.

Within Quality Nutrition, which is our Sports Nutrition segment, organic growth amounted to 19%. We continue to see a strong recovery in the production of sports nutrition products, and our assessment is that this positive development will continue during the year.

However, we do see an increased volatility in the whey protein market prices, which we expect will challenge profitability in the coming months.

In Australia, our brand Body Science is successfully capturing synergies with our bar production facility, while the underlying business continues to show strong momentum.

Finally, we have the Nordic Distribution segment that grew 6% organically during the quarter. Easter fell early this year, which contributed to part of the growth, but overall performance was primarily driven by our strong offering through a well-developed store network and a broad Nordic market presence.

Finally, let's look ahead to what's next for Humble Group. After another quarter as acting CEO, it is clear that our increased operational focus is delivering results. We're seeing tangible improvements, and I'm proud of the work our teams are doing across the group to drive this development forward.

Our cost saving program is progressing according to plan, and we are already seeing positive effects in both earnings and cash flow. As mentioned, we have also announced the first steps of our strategic review. We have acquired Willumsen in Norway and after the end of the quarter, Jutexpo in the U.K.

These are 2 add-on acquisitions with a clear strategic rationale and a strong fit to the group. At the same time, we have also completed divestments of a few companies as part of our efforts to streamline the group.

Altogether, these transactions add approximately SEK 73 million in annual revenue and around SEK 14 million in EBIT, excluding any potential synergies. At the same time, we're also strengthening our focus on overall profitability profile over time.

The work to streamline the group continues as planned. And as part of the ongoing strategic review, both acquisitions and divestments may be announced in the near term.

Today, Humble Group is a large FMCG group with multiple companies operating across different categories. While we might seem broad, we are very, very focused, and we intend to further strengthen that focus through the ongoing strategic work with the ambition to build a more profitable, forward-leaning and scalable group.

During the quarter, we also announced that Anders Fredriksson will start his journey as Group CEO in September this year. Anders has a strong FMCG background, most recently as the CEO of Lofbergs.

I'm very positive about bringing that experience into the next phase of the company. And as I have previously communicated, I look forward to continuing to support the business in an operational role following the transition as well as remaining a long-term shareholder and member of the Board. Thank you all for listening in. We will now open up for the Q&A.

Thank you, Noel. So let's go through the questions we have received here from -- maybe we should start from the bottom. There are some questions about the CapEx outlook from Victor and remainder of 2026.

We can -- and also some question about from John at G6 Investments. Remaining CapEx for Grahns Hovden and the second bar line in Australia. Well, we can comment on that. The CapEx for the quarter amounted to SEK 41 million for these 2 investments jointly.

And for the Grahns facility, we estimate that we have approximately SEK 40 million left in CapEx during Q2 and some of it also to spill over in Q3. And for the bar line in Australia, we estimate that we have approximately SEK 7 million, SEK 8 million in remaining CapEx to recognize during the second quarter.

But besides that, also the CapEx outlook for the remaining 2026 is -- that is there are 2 main initiatives that we have communicated and also have announced, and we do not have any other large initiatives in the pipeline. So besides that, it's more maintenance CapEx investments of approximately SEK 15 million per quarter to anticipate.

And then we have a question from Victor about the announced -- yes, the divestment capital loss of SEK 6 million from the LEV stores, if that is included in the nonrecurring items of SEK 10 million. And the answer to that is, yes, it is included. Let's see what we have.

We have a question here regarding the gross margin in the Distribution segment. And if we have any initiatives to lift this up as we scale further.

If we just comment on the gross margin in general for all the segments, it is a main priority for us. We are currently following up closely with each businesses through dedicated sessions where we review concrete actions, expected time lines and impact. And this is an ongoing priority as we scale the group.

Now if we look at the distribution segment in particular, we see a small uplift on the gross margin. Worth mentioning is that within our Distribution segment, we do not only sell our own brands, we also sell external brands, which means that we need to be right when it comes to the pricing because we are operating in a competitive market.

Now with that being said, Privab, as an example, has a large pick-and-mix concept that is being sold at ICA. And we see a potential of adding some more of our own products as we scale the Grahns factory into Privab, which will improve gross margins in that segment.

Thank you, Noel. And -- maybe we should start looking at the questions from John here, G6 Investments. I think it's 4 questions in 1. And maybe, Noel, you want to start?

Yes. Regarding the M&A, the strategic review is progressing well. And as mentioned, we have already taken several steps as part of that process. We will come back to the market when we have something more concrete to communicate.

But our main focus is to ensure that we get the right outcome rather than being driven by a specific time line. So more broadly, these transactions should be seen in the context of our ongoing strategic review, where we continuously evaluate the portfolio based on current conditions, performance and forward-looking perspective.

Second question there, how has increased freight costs impacted your gross margin in the quarter?

We can just short comment on that. Yes, we do see some impact on the freight costs during the later phase of the quarter. But I think the main impact will remain to be seen in the second quarter if the -- especially what happens in the Iran-U.S. conflict will have some impact to that, of course.

Worth mentioning here is that we have a really strong team at Solent working with securing freight contracts and competitive freight tariffs for other subsidiaries in the group, and we are confident that they are doing a great job securing the best prices that we can see on the group level. Third question, I think we can just cover them all, right, while running them through.

Sure.

Body Science had a good quarter in Australia. We see that they are regaining some pace. But I -- sorry, I was reading the question at the same time. EBITDA margin was down compared to last year.

Yes. Just double clicking on that one in the Quality Nutrition segment. The EBITDA margin was, first of all, impacted by the management fee allocation that we've mentioned earlier, but also some other subsidiaries in the Quality C Nutrition segment grew very well.

For example, Ewalco grew very well and did a fantastic performance in the quarter, but they have a lower gross margin and lower margin profitability overall. So that explains a little bit why the margin is down for that segment in the quarter. Noel, current trading and the outlook for the year?

I mean growth has really never been a problem for Humble Group. We have wonderful entrepreneurs. We have products that are attractive to the market, and we're confident that we will continue to be able to grow the group at satisfying levels, excluding any potential M&A.

Perfect. And then we have a question from [indiscernible] a private investor in Quality Nutrition. EBITDA is declining. I think we've covered that one, but also another one about the negative impact from the consumer loss at Solent and price pressure at Privab.

I think we can just comment on the Solent impact, that was an event that occurred in the later stage of 2025, and we expect to see some impact from that during Q2 and also Q3, but we expect them to regain, especially some of the mitigating sales that they have won is starting to take impact in the later stage of '26.

And also the price pressure for Privab, just to mention that very shortly. That is continuously challenge they have in a competitive market, but we are confident that the team is doing everything they can to review the prices and also make sure that we stay on top to be competitive in that market and take impact. So we expect to have a positive development in the segment going forward. Noel?

We have a question here from Motzfeldt. I appreciate that comment. Thanks, Motzfeldt . Can we expect higher gross margin in the end of the year?

So I think it's worth mentioning that if you look at our 4 segments, we have 3 segments that are running really, really healthy gross margin profiles. Now with that being said, our Nordic distribution arm is quite significant in sales. And as that segment grows and the product mix changes, this alters the overall gross profit of the group.

Now with that being said, the gross margin is a key priority for us and something we are focusing on quite intensively during this year. And this is also a central part of our operational agenda and the core responsibility of each CEO within each business.

But there is a lot of work going on, and I'm certain that the entrepreneurs, together with the executive management teams and the headquarters are doing everything that we can to get the gross margin up.

Perfect. Thank you, Noel. Then there is a question about the EBITDA breakeven for facility in Skovde and when you expect to have some EBITDA contribution once it's fully operational. Do you want to touch a little bit on when it's expected to be open?

Sure. So -- the process is going on well. We've had some slight delays on some parts of the machinery, but we feel confident that we will open up that facility at the end of -- or at the second part of this year.

Now with that being said, as mentioned earlier, we have already secured a few production contracts, not only for our own internal brands, but also external brands. It's not something we can announce quite yet, but we are certain that the demand for our confectionery production is high, not only for the usual sugar confectionery business, but mainly also the sugar-free or sugar-reduced side of the business.

We will get back to the market with some more info when we can, but we feel very, very positive that we'll be able to fill up that factory with some good quantities as we move ahead.

Thank you, Noel. And also double-clicking -- tagging on to that, there's a question from Motzfeldt about the specific target for the net debt to end of the year.

We repeat the financial target we have is 2.5x. But of course, we -- I think Noel writes in the CEO letter as well, reaching that level gives a good flexibility to continue to be mindful of the leverage ratio and -- but yes, that is the bottom line.

And as our focus ahead is to gain some more profitability and improve our cash flows, we do see a natural development of the net debt going down even further.

And adding to that, we might announce some divestments, which will bring that leverage down quite significantly. We're not there yet, but we're working on it.

Yes. And also another question from [indiscernible] about the divestment and bolt-ons we announced. We don't -- we generally don't comment about the prices we pay or the cash we receive for businesses that is out of respect from a negotiation perspective. And -- yes, that's what we can say very short about that.

Just see if we have covered all the questions or if we have any others coming in. Yes, I think I was trying to go through all the questions. I think we've covered all of them. One last one is coming in from Stefan if we can comment on the price initiatives that are underway with further actions ongoing, what exactly are you doing? And when can we expect to see the effects on this?

I mean this is an ongoing work, and we are trying to work in a structured and proactive way to optimize our cost of goods sold. So we have several initiatives in place such as supplier strategy, how we work with products coming in, but mainly also how we work with potential price increases to our customers.

So it's ongoing work broadly at a group level. And we're certain and positive that we will see some positive outcome from that work as the business continues to grow during the upcoming quarters.

Okay. Thank you, Noel. I think we have been through at least most of the questions. It was a big interest for the presentation today, which we, of course, are very happy to see. Any final remarks from you, Noel?

No, I would just like to send a big thank you to the whole group. We have a lot of employees in the group that works effortlessly to continue to scale and improve the group financials and overall health.

We are excited about the future ahead. I'm particularly excited to get Anders on board as well to get some outbound strategic experience. And yes, thanks a lot.

Thank you so much for listening in.

Good morning, everyone, and welcome to Humble Group's presentation for the Fourth Quarter of 2025. My name is Noel Abdayem, and I'm the acting CEO of Humble Group.

With me today, I have our Group CFO, Johan Lennartsson.

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 SEK 2.1 billion. 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 U.K. 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 the 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 6% organically during the quarter. This is, of course, then driven from a strong demand in our -- mainly in our Future Snacking and Quality Nutrition segments.

Looking for the full year and in 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. But for the quarter, we ended up, as Noel said, on SEK 2.1 billion. And also, worth double-clicking on this. We faced a significant currency impact of SEK 87 million in the quarter and in total for the full year of SEK 180 million.

Looking at the profitability, the gross profit amounted to SEK 665 million, 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 noticed a significant currency impact of SEK 33 million negative for the quarter. But looking at the profitability and the EBITA, especially -- adjusted EBITA decreased to SEK 139 million. The adjusted EBITA margin reached 6.5%.

We had, once again mentioned, the currency impact had a negative impact of the overall profitability for the quarter with SEK 7 million. And apart from the challenges in Sustainable Care, where we have volatile and tough market conditions in both the U.K. and the German market, we could see a very positive development and positive contribution on the profitability from our Future Snacking and Quality 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 change in net working capital of SEK 127 million. That is in line with previous year. But more positively, it's also that we noted a strong release from the net working capital of SEK 79 million, mainly driven by a good release from -- of our inventory levels, which came down and contributed with SEK 86 million in the quarter.

The cash flow from operations after change in net working capital amounted to SEK 206 million, which should be compared to SEK 132 million previous year. And also looking at some cash flow metrics as our free cash flow amounted to SEK 167 million, which is a significant decrease from previous year of SEK 95 million. And we converted 126% of the cash flow from -- in relation to EBITA.

So all-in-all, we are very happy with the cash flow in the fourth quarter. And also looking -- glancing at the full year, just to double-click on that as well, we are happy to conclude that Humble generated over SEK 0.5 billion in cash flow from operations during 2025. That is an increase of 80% year-on-year.

With that said, cash flow and be mindful with the capital employed is 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 -- excuse me, the leverage is continuing down, reaching 2.6x adjusted EBITA 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 in bank of SEK 38 million for the year. And we also had a negative impact on the profitability of SEK 18 million for the EBITA for the year. So taking these two effects into account, totaling comprising to SEK 57 million for the full year.

The FX adjusted leverage would have decreased down to 2.4x. So with that said, the FX is challenging for us during the quarter, but we need to adapt to the situation we are working in -- 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 confectionery site at Grahns Konfektyr of approximately around SEK 70 million during the first half during 2026, which will have a temporary impact on the continued deleveraging. 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 are happy to go ahead.

Thank you, Johan. 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%, and several brands within the segment continued to gain market share through new launches and increased listings.

During the quarter, we also started the installation of our new production facility in Skovde. 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 EBITA in the segment was also affected by currency effects of minus SEK 5 million.

Within Quality Nutrition, which is our sports nutrition segment, organic growth amounted to 11%. 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 EBITA in this segment was also affected negatively by currency effects of minus SEK 5 million -- sorry, SEK 2 million.

Finally, we had the Nordic Distribution segment that grew organically by 3% 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 Privab, we have also initiated a warehouse relocation to support our future expansion. At the same time, the consolidation of the platform into OnePrivab is progressing according to plan.

Together, these new initiatives will strengthen our operational capabilities and position us well to hopefully win more additional contracts within Swedish retailers during the year.

Finally, let's look ahead to what's next for Humble. After one quarter as acting CEO, my view is clear. Humble 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're 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. And 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 here, we can see that we've had quite good interest and 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 FX going forward as well as on gross margins, strong SEK versus purchases in U.S. dollars.

And -- Yes. Here, we can just be in short to say that 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-Marius, 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 you 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. 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 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 the segments we are definitely looking at improving and inviting more companies into.

One short question about the ongoing CEO recruitment and Noel, 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 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 2 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 make sure that we have enough inventory to meet the strong demand in our underlying segments while being as efficient as possible with the capital. So that is the core questions that we balance on a day-to-day basis, to reply on that question.

Yes. And Noel, maybe from Victor at DNB Carnegie, 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 U.S. market. And at the same time, our distribution arm, Privab, does still get significant inbounds and sales from different retailers, both online and offline. They are currently selling candy to the United States. So I would say that it's progressing well. And our website is also up and running and performing well.

So the U.S. 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, True Dates have received several significant listings in the U.S. and less than 2 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, 14% of sales.

I wouldn't say -- yes, all-time high, of course, perhaps in absolute measures, but it's in line with the 14% was the same level last year as well. And year-on-year, we have a certain percent of other external expenses to net sales.

And of course, a question about marketing costs and marketing spend. That's something that we continue 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 bang for the buck. Just our short thoughts on that one.

Let's go in through this. A lot of questions today, and that's, of course, very happy to see good interest for this presentation.

Noel, 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? 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.

Yes. And also to tap into that one, of course, now we've made the quarter that we've been through has been -- we have had high focus 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 during 2026.

Let's see what we have more -- which more questions we 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 a satisfying utilization level during second half 2026, is a question from Victor at DNB Carnegie. Maybe, Noel, you want to share what's the...

With the update of the candy factory?

Yes.

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 is looking very promising, not only for our sugar free production line, but also for our standard sugar candy.

Thank you, Noel. One question from Victor at DNB Carnegie, was about the working capital. Is this structural or seasonal the effect that we saw here in the fourth quarter? And of course, it's -- 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 Humble to make sure that we are being improving the efficiency with the capital employed quarterly every quarter as we go.

And also it's very -- a little bit challenging to guide on the expectations going forward. But we can -- what we can say about working capital for 2026 is things, seasonal things that do have an impact 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 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 do what we can to optimize inventory levels to both drive sales but also be efficient with the capital employed.

One question from Sergi Suades, Aguja Capital, regarding the outlook for capital expenditure. I think, Noel, you replied to that a little bit regarding the CapEx investment in Grahns. We expect to have approximately SEK 700 million left to deploy in that project. But besides that, we have the Bars investment in Australia that also is near completion and it's not expected to drive that much cash during 2026.

Besides that is maintenance CapEx, mainly, I would say, no new big investments that are planned currently. Our big focus is to make sure that we continue to reduce the overall leverage and improve the financial situation -- financial position, I would say.

Two, I think maybe the last two questions. I hope we have covered most of them. If we want to touch a little bit on Solent, we're mentioning a challenging quarter in U.K. 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 mention that it's the name of the game. You win some and you do some. But we're, at the same time, happy to say that Solent is still winning new business in the U.K. However, it's important to mention that the contracts that Solent to 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 be released and entered into the store during the summer or in Q3, Q4. So it takes some time. But we feel that the team are on it. We work closely with the management team over there, and we're seeing good progress in new deals.

Perfect. Thank you, Noel. 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 will 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 weekend ahead. All the best.

Thank you so much for listening in.

Good morning, everyone, and welcome to Humble Group's Presentation for the Third Quarter of 2025. Many thanks for taking the time and calling in on this presentation. My name is Noel Abdayem, and I'm the new acting CEO of Humble Group. With me today, I have the Group CFO, Johan Lennartsson.

Good morning, everyone.

For those of you who don't know me from before, I am the founder of the Humble Co., which is part of the group, and I have been part of Humble for many, many years, not only in the management team, but also as part of the Board. I know the group inside out, and I have had a long relationship with many of our entrepreneurs. To those of you calling in for the first time, welcome, and thank you for joining the Humble journey. There will be a Q&A at the end of this presentation.

Let's dive into the quarter. The third quarter marks a clear step forward for Humble Group, where we can see resilience and a solid organic growth with revenue reaching almost SEK 2.1 billion. We are delivering a strong cash flow generation, and I must say that I am proud to be part of a group that consistently delivers impressive growth numbers, and this quarter is not an exception.

We've seen steady growth across all our key segments, which really demonstrates the strength of our business model even in a challenging market environment. It shows that our diversified structure, our strong local teams and our focus on long-term innovation, service and brand building are working. Despite external headwinds, we continue to deliver solid results, and we are building a stronger foundation for a sustainable growth ahead.

Profitability and cash flow remains key priorities for us, and we have taken some steps in the right direction. Our financial position continues to strengthen, but we are not where we want to be yet, and we are fully committed to improving further. Let's dig a bit deeper into the numbers. Over to you, Johan.

Thank you, Noel. Our net sales for the quarter amounted to nearly SEK 2.1 billion, and we can happily conclude that our last 12 months figures passed an internal milestone of SEK 8 billion this quarter. But the sales in the quarter corresponded to a total growth of 10% organically, and we had a negative currency impact of minus 3%.

The underlying growth was mainly shown in our Nordic Distribution segment, where we had a strong demand for our customer offering. The segment grew the net sales by SEK 86 million for the quarter. We also saw a strong increase in sales of our confectionery products in the Future Snacking segment who grew net sales by SEK 40 million and comprising a total growth of 17%.

Looking at the Sustainable Care segment, the overall net sales development decreased by 1%. But please bear in mind that we had a negative currency impact here of minus 5%, meaning that the underlying organic growth for this segment was 4% for the quarter.

Looking at Quality Nutrition, we see that we have a fine recovery from previously some tougher periods in Q4 last year and especially Q1 this year. But we now start to see that orders is being a little bit more normalized, and we look forward to what we can achieve in the fourth quarter.

So looking at the profitability, our gross profit amounted to SEK 636 million for the quarter, corresponding to an increase of SEK 28 million versus last year. The gross margin declined -- decreased to 30.4% from 31.2% in the same quarter last year. The overall margin development was mainly impacted by a negative currency impact of, in total, SEK 22 million for the quarter. And this comes from -- we have a natural currency exposure in the Quality Nutrition segment, where we have an exposure towards the Australian dollar, where we have a negative impact of SEK 8 million. And we also have another natural exposure in the Sustainable Care segment, where we have our largest group company, Solent, U.K.-based retailer company. where we had a negative gross margin -- gross profit impact of minus SEK 12 million. Moreover, we also saw that we had a little bit unfavorable product mix in one of our strongest growing segments, Nordic Distribution, which led overall to a challenge to maintain the gross margin that we had in the previous quarter last year.

But bottom line is we see this as a temporary mix effect and not a structural change in the underlying profitability of the group. If we continue looking at the underlying profitability, the adjusted EBITA for the quarter amounted to SEK 143 million, corresponding to an EBITA margin of 6.8%. We have previously invested heavily in sales and marketing in order to support our top line growth, and this has also shown results leading to increased sales. But this has also a negative contribution on the quarter with an increase in these investments of SEK 22 million.

And to be clear, we are not satisfied with the overall margin and profitability development. And by saying that going forward, we shift our focus from top line investments to increase the margin expansion and trying to do our best in order to increase the profits from our subsidiaries, including also our hero brands. That being said, we will still invest in marketing, but we will increase our focus to ensure that we have a satisfying return from the investments that we are doing.

Previously during the quarter, we've also communicated that we launched an efficiency program. We recognized a cost efficient -- cost provision of SEK 52 million during the quarter. This includes also a provision for severance pay to the former CEO of SEK 12 million. But our expectation is that this efficiency program will contribute to the profitability in the next coming months -- next 12 months with around SEK 80 million.

Thank you, Johan. Let's talk a bit more about our segments. Starting off with Future Snacking. We continue to see a strong net sales growth, driven by an increased demand from our customers and the profitability is developing well and in line with our expectations. Our Arena confectionery business is performing strongly, and our main focus ahead is to fully utilize all available production capacity. We believe that the global Swedish candy trend is here to stay, and we want to make sure that we capitalize on it.

At Grahns, which is one of our main production facilities for candy, we have finalized the lease agreement for the new factory. This is a really exciting project that will form the foundation for a significant increase in our candy production capacity. And we expect the new factory to be up and running by mid-2026. We have already started discussions to fill up the new capacity, and it feels very promising.

If we dig a bit into our brands in the segment, the True Company continues to expand its product range and the rollout of the TruDates is going according to plan, with strong traction in Scandinavia, Germany and many other European markets. We have also received our first listings in the U.S. at the popular chain Sprouts and have a very interesting dialogue going on with some of the leading retailers in the U.S. I must say that I'm impressed of our ability to grow in the U.S. without spending a fortune on marketing.

Next up is our Sustainable Care segment, where the net sales were in line with the previous quarter. We're finally starting to see a recovery in the U.K., where sales have been somewhat slower in earlier quarters due to challenging market conditions, but we are now back in line with previous years, which feels great. Combined with the strong cost control, this has contributed positively to the overall profitability for the quarter, and we continue to drive product innovation to regain our growth.

Our licensing business, where we partnered up with international brands is also growing well and continues to deliver solid and satisfying results. We've also seen new product launches from the Humble Co, where the product range has expanded and the new rebranding is driving increased consumer engagement.

And finally, the partnership with Babblarna, which we first announced at the Capital Markets Day about a year ago, has now turned into reality. We have already launched a few product lines within Oral Care and are happy to announce that our diapers have just hit the shelves at [indiscernible] in Sweden, which includes popular retailers such as Hemkop, Willys and City Gross. I really think that it's fantastic that we managed to replace some of the world's strongest brands with our innovations.

If we continue to the Quality Nutrition segment, we have delivered a strong underlying growth with net sales up 11% in the quarter. The gross profit was, however, negatively affected by currency movements, and we did also increase our marketing spend during the period. Initiatives that have not yet shown full results, and we're currently evaluating and adjusting these marketing investments moving forward. Our drink line has not yet reached its full potential, which is, of course, disappointing, but the goal is to have production fully up and running by early 2026, and we're finalizing negotiations with many brands that want to move their production into Humble. On a positive note, we continue to see strong momentum in the Sports Nutrition category, particularly within the production of bars and protein powders.

Finally, we have the Nordic Distribution segment, where we continue to see a strong demand and our work with solid cost control has developed the profitability and kept the margin stable. Looking ahead, our company, [ Privab ] has signed a new warehouse contract, which would enable us to expand even faster starting January 2026. For those of you who are not familiar with Privab, it is one of our largest distribution company with more than SEK 2 billion in annual sales.

Thank you, Noel. And looking a bit about our cash flow for the quarter, we are happy to see that the quarter is one of our absolute strongest quarters in the company history. And we are satisfied with the overall cash flow development from the operations that amounted to SEK 195 million compared to SEK 142 million in the previous quarter. And we continue to focus on improving our net working capital, especially to optimize the inventory levels in order to reduce cash from our warehouses. And we think there is a lot more to do here. We're not satisfied with the current levels, but we also see this as a long-term development project that we continue to focus on internally.

On the -- other positive side is that the short-term liabilities had a positive cash flow impact by SEK 20 million despite the fact that we repaid tax deferrals of SEK 45 million in the quarter -- SEK 45 million in the quarter, sorry. And adjusted for this repayment of taxes, the cash flow from operations amounted to SEK 240 million compared to SEK 142 million in the previous year.

And speaking of strong cash flows, this had also a positive contribution to our leverage that came in on 2.7x adjusted EBITDA, excluding any impact from leasing. And we have spoken about the leverage before, but we have continued -- focusing to continue this downward trend. But we also want to highlight that we expect some negative impact in the following quarters as we have a few announced CapEx investments that will have a negative impact on the overall leverage development. But overall, we -- as communicated earlier, we have a strong demand in our products and currently investing in production equipment in order to get the new facility at Grahns Konfektyr up and running. And we have also invested in a new additional bar production line in Australia. But both these capital investments is ongoing as we speak, and we expect them to be finalized during the second quarter next year.

Thank you, Johan. Finally, let's look ahead to what's next for Humble. As the new acting CEO, my focus and mission is crystal clear. We need to become more profitable, and we will continue to drive organic growth just as we have done before for a long time, but in a more efficient way within all of our existing companies. The management team are working closely with all portfolio companies, and we are doing a deep dive into what we can improve and how we can become even sharper. We are also working hard to strengthen our financial position, where we are aiming to reduce leverage toward our financial goals over time and maintain a strong cash flow generation.

I will make sure that we deliver on our SEK 80 million efficiency program that we announced a few weeks ago, and it will be a central focus for us in the upcoming weeks. More than SEK 50 million of this has already been set off for this quarter. On top of that, we will continue to streamline the group through selected strategic initiatives and potential divestments. And we have already started evaluating several opportunities as part of our ongoing structural review with the aim to create a more focused, profitable and long-term sustainable group. I am very excited about the road ahead, and I am together with my team committed to delivering value to all of our customers, partners and shareholders.

Thank you all for listening in, and a big thank you to all of our entrepreneurs for your hard work. Without you, we are nothing. We will now open up for the Q&A.

Thank you, Noel. And I'm going through the questions that we've received so far. And if you have any questions, please just send them in.

First of all, first question I see here is from Victor at DNB Carnegie. What happened to the margin in the Quality Nutrition? The margin declined 9 percentage points year-on-year to negative 2.5.

And I think I can reply to that one. Mainly we've seen some challenges in the profitability in our Australian part of the business where we had a strong -- really strong comparatives last year. But here is some of the marketing activities that we've invested in where we haven't really seen the full potential or the full outlook for it yet. But please also bear in mind that we've had some FX headwinds in this segment, and we've also increased the marketing spend for the quarter. But this is something that we're now reviewing as we speak to see how we can take a turn on that going forward.

And also, please bear in mind that the unadjusted numbers in the report also includes cost provisions that hits the overall profit. So reviewing the profitability should be in -- or we refer to the adjusted profitability targets. Forward, yes. Noel, maybe a little bit about -- next question is about the U.S. acting CEO.

So I got a question here. How long I will remain as a CEO? And how I balance my new role as acting CEO with many of our other engagements. What I want to say is that my full focus right now is my role at Humble Group. And it's important to mention that Humble is one of my largest holdings, and it's extremely important to me that we do what's best for the group. I don't have a fixed time limit. I will be here as long as needed, and it's up to the Board to decide on the appointment of the new CEO. They have, however, initiated a recruitment process, but we are not stressing anything. I'm here as long as needed.

We have another question that came in here. How the launch of the new website, swedishcandy.com has been received?

It's been received well, I would say. We've managed to obviously get the strongest IP on the market, not only on the domain, but also on the social media accounts. And we just started sales a few days ago. And for those who are interested to see how we work, you can check out TikTok or any other channels because another question that came in is if we see a potential of working with any major American influencer? And I would say, as of now, we're working with the micro influencers, and we want to make sure that we can see the results of our investments before we look at potential larger partnerships.

Thank you, Noel. Thank you all for writing so many questions, and we're just going to try to capture them all.

Next question from Victor at DNB Carnegie is related to the efficiency program were higher than communicated from SEK 35 million to SEK 52 million, but expect the savings to remain the same. And yes, here we can just conclude on -- after we communicated about the efficiency program, we had also a change of CEO, and this was a decision taken in September, but with a postponed announcement. And yes, there is a cost related to the former CEO of SEK 12 million recognizing in the third quarter. So that is yes, that is the difference that you see in the numbers. But from the previously communicated numbers, there is no major differences from what we see today.

And also looking at the question from Linus at Nordea, the Future Snacking, we had a strong organic growth with an adjusted EBITA margin declined to 11.6% from 13%. What drove the margin compression? And here, we can say, in general, we had a strong quarter for the Future snacking, but we've invested to marketing and sales activities to make our brands to give them the full potential plan. And we also had a minor negative currency impact, but not very big, but that's the main explanation why we have a little bit -- yes, a little bit lower margin in this quarter.

Let's see what else we have. Noel, maybe you would like to elaborate a little bit on the insights from the U.S. market.

Absolutely. So as of now, when we look at the Future Snacking arm of the business, we are focusing on getting listings for our TruDates mainly. And we're happy to announce that the perception of the product that we have developed is great, and we are about to launch with some of the major U.S. retailers in the upcoming months. We can't mention them yet, but we will, of course, get out with the info when we can.

Worth mentioning because I see a lot of questions coming in here about the Swedish candy trends is that we already do quite a lot of business to the U.S. market. Many of the websites and many of the retailers that actually sells the Swedish candy today buys it them from Humble, and it can either be directly through one of our distributors or directly through one of our factories. So we are targeting the U.S. for the Swedish candy market, and it's going well.

Thank you, Noel. Another question from Linus here is if we can share some details on the headcount reductions and organizational changes from the efficiency program and if we can expect some divestments. And yes, very briefly, there is no major changes from what we already communicated in headcount. It's around 70 full-time equivalents that is effective from these changes. Some changes is already executed. And yes, we're working on making sure, as Noel said, to deliver the full potential for the coming 12 months. And in terms of divestments, Noel would you share some thoughts on what we are thinking there?

We are looking at potential divestments. I won't mention any type of specific company as of now, but our focus is to streamline the group and make Humble Group a bit more understandable to understand moving ahead.

Thank you, Noel. Question from [ Musafar ]. What kind of M&A activities can we expect going forward?

So I would say that we are still looking at M&A activity and potentials. But moving ahead, I think bolt-ons makes more sense for us where we can integrate the M&A target fastly into our current structure. But we are in both the divestment mode, but we are at the same time looking at new opportunities as well, where we feel that we have a clear focus and can get better investment results.

Yes. Thank you, Noel. A question from [indiscernible] here at [indiscernible] Capital. Can you share your expectations for the fourth quarter and the upcoming Christmas season in terms of demand and organic growth and the margin outlook? And I think in general, it's very early on to say a little bit where we -- how we foresee the fourth quarter in the coming quarter. But generally, it is our strongest quarter historically. So we are excited to see where we will end up. That's basically what we can say right now.

Let's see if there's a lot of questions coming in. So we're just trying to get and publish all of them. Let's see how we -- acquisitions -- let's see if we can get [indiscernible] as well. So just a few last questions. We sort of got one from [indiscernible] here as well, planning acquisitions in 2026. I think Noel has already replied to that one. But one from [ Anders ] here as well. You mentioned that you're evaluating marketing investments in the Quality Nutrition. Are you also evaluating the size of the marketing investments in Future Snacking?

We are. With the mindset of becoming more profitable, we need to make sure that we look at the marketing investments that historically had been done and moving ahead will be done. So I believe that many of our companies has reached a size where they can still grow nicely without having to spend too much marketing money. And this is a discussion that is ongoing, which -- with each as a single company. And I think that we can extract some fast results from that activity moving ahead.

Thank you, Noel. I think we have covered most of the questions that are coming in today. There is a lot of questions from you, and we appreciate your engagement. And yes, you have some final words, Noel?

Thank you all for calling in. As mentioned, we are all very excited about the road ahead. And thank you for your support.

Thank you so much for listening in today.