Hövding Sverige : Hövding Interim report Q3 2020

Hövding Sverige AB (publ)	T + (46) 40 23 68 68
Bergsgatan 33, SE 214 22 Malmö	Org nr. 556708 - 0303

HÖVDING INTERIM REPORT Q3 2020

July - September 2020

Hövding - back on firmer ground

FINANCIAL RESULTS FOR THE PERIOD

SIGNIFICANT EVENTS DURING THE PERIOD

• Number of Hövding helmets sold during the third quarter increased to 28,586 (11,199) (+155%).
• Net sales of TSEK increased to 45,312 (18,583) (+144%)
• Gross margin of 24% (27%).
• EBITDA of TSEK -6,688(-16,648). Operating profit includes an item relating to restructuring costs of 3,750 TSEK of a non-recurring nature.
• Profit after tax TSEK -8,097(-17,304)
• Profit per share SEK -0,34(-0,78)
• Cash flow from operating activities TSEK -3,096(-9,429)

Hövding Sverige AB (publ) announce result in new share issue. The subscription period for the new share issue with preferential rights for existing shareholders ended august 28th 2020. It was subscribed at 174%.

Subscription with support of preferential rights was over 97% of the offered shares. The new share issue results in cash amounting to 60,9 MSEK prior to expenses. Guarantee commitments made have as a result not been activated.

Adjustment to the company cost structure.

During the quarter implementation of reduction in the organisation and a more efficient sales and marketing approach was carried out. In total the personnel related changes amount to full year savings of approx. 7MSEK.

All changes are completed and the non-recurring cost of 3 750 TSEK is included in the quarter.

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Hövding - back on firmer ground

The number of Hövding helmets sold

during the third quarter 2020 increased by 155% compared to the same period last year.

Net sales increased by 144%.

Last year the phasing out Hövding 2.0 and the introduction of Hövding 3 and this years previous quarter partly closed down key markets make fair comparisons difficult though.

The result, except restructuring commented on below, we see as a fair indication of where we are at right now. Our three key markets represent 95% of sales and they all show potential in further growth. In the most penetrated market, Sweden, we sold 11 322 units with large shares through our key accounts in the sporting goods channel and our design channel. Denmark and Germany were marked by physical restrictions during spring but have now come back to higher levels again.

Compared to quarter two Denmark increased by 59% and Germany by 90% in sold units. We also see a trend towards more online purchase and are focusing on taking our direct share of this. Sales though our own web shop represented 7% of overall sales in the quarter.

Covid-19 have reshaped our transportation patterns in cities and urban cycling, already on the increase before, have accelerated further. The cycling industry as a whole is reporting strong growth. To what precise extent this positively effect Hövding is difficult to judge. Generally, it is obviously positive, but we should remain alert to possible imposed restriction in society that can affect our dealer's ability to reach the final consumers. In the shorter perspective it is Sweden, Denmark, and Germany we follow more closely as they represent the core of our sales currently.

We have previously announced an oversight of the company cost structure. From an organizational perspective this has now concluded and been implemented. Since start September we work more digitally with our customers and with higher efficiency in general. The quarter includes non-recurring cost of 3 750TSEK.

Moving forward it represents ca 7MSEK in saving full year with start quarter 4.

In addition to the now completed reduction in personnel we will continuously work with challenging our operational expenses.

Adjusting our cost structure while planning for reasonable growth and focus on achieving profitability is the plan communicated earlier this year. This quarter is the start of this and restructuring our personnel cost is now concluded and we look forward continuing the path started.

Fredrik Carling

CEO

Hövding Sverige AB (publ)

SALES AND RESULTS

• Net sales for the period was TSEK 45,312 (18,583).

The number of helmets sold during the period reached 28,586 (11,199). Of these,

31% (16%) were sold through wholesalers, 62% (75%) through retailers and 7% (9%) through the company website. Sales share by country shows Sweden 40% (45%), Denmark 28% (37%), Germany 27% (14%), the UK 1% (2%) and for other countries 4% (2%).

The gross margin for the period amounts to 24% (27%). The gross margin is mainly affected by production costs at 82,6% (83%), transport and customs at 4,8% (6%) and provision for future and existing warranties at 12,6% (11%).

Our business expenses during the period reached TSEK 19,100 (21,617). Among the expenses, TSEK 8 993 (13 359) denotes external costs, and TSEK 10 107 (8 258) refers to personnel costs. During the period, operating expenses were charged with structural costs of a non-recurring nature of a total of 3,750 TSEK. These are allocated on other operating expenses with 852 TSEK and on personnel costs with 2,898 TSEK.

EBITDA for the quarter was TSEK -6,688(-16,648). Profit for the period before tax amounted to TSEK -8,097(-17,304) having been burdened by write-offs and devaluations of intangible assets at TSEK -1,014(-457) and tangible assets at TSEK -176(-148).

INVESTMENTS

No significant investments were made during the quarter.

LIQUIDITY AND FINANCING

The liquidity of the company at the end of the period amounted to TSEK 66,134 (26,687). Cash flow from the ongoing operations during the period amounted to TSEK -3,096(-9,429).

EMPLOYEES

As per 30 September 2020 the number of employees was 35 (39).

RISK FACTORS

Risk factors are described in Hövding's 2019 annual report on page 52.

CERTIFIED ADVISER

Västra Hamnen Corporate Finance AB is Hövding's Certified Adviser.

DATE OF REPORT

At the end of each new quarter, Hövding publishes a financial report. The next report is scheduled for publication on

• 22 February 2021 - Year-End report 2020

ACCOUNTING PRINCIPLES

This report is presented according to the Annual Accounts Act and BFNAR 2012:1 (K3). The accounting principles are unchanged from the previous year.

AUDITOR

This report has not been audited by the company's auditor.

CORPORATION DETAILS

Hövding Sverige AB (publ), organisation number 556708-0303, is a limited liability company located in Malmö. The company's shares are listed on Nasdaq First North Growth Market in Stockholm.

INFORMATION

Please direct any queries regarding the content of this interim report to: CEO Fredrik Carling

Ph: [phone]

[e-mail]

Hövding Sverige AB (publ) Bergsgatan 33

214 22 Malmö

[phone]

The company board and the CEO confirm that this interim report gives a fair overview of the company operations, position, and results.

Fredrik Arp (ordf)	Helén Richenzhagen	Tony Grimaldi
Alexander Izosimov	Maria Minskova	Peter Svanlund
Fredrik Carling (vd)

Hövding Sverige AB (publ) is listed on the Nasdaq First North Growth Market since 2015. Västra Hamnen Corporate Finance AB is Hövding's Certified Advisor.

E-mail:[e-mail], tel: [phone]

For further information, please contact Fredrik Carling on [phone] High resolution images can be downloaded here:

www.mynewsdesk.com/se/hovding

The information herein is provided by Hövding Sverige AB (publ) in accordance with its duties of public disclosure as stipulated by the EU regulation on marketplace misuse. The information was made public by Fredrik Carling, CEO of Hövding Sverige AB (publ), on 20 October 2020 at 08.30am CET.