Hövding Sverige : Interim report Q4 2020

Interim Report October - December 2020

Growth continued in 2020

Financial resultats for the period

• • Number of Hövding helmets sold during the fourth quarter increased to 33,853 (28,551) (+19%)

• • Net sales of KSEK increased to 52,759 (46,467) (+14%)

• • Gross margin of 24% (22%)

• • EBITDA of KSEK -5,708 (-9,229)

• • Profit after tax KSEK -7,387 (-10,137)

• • Profit per share SEK -0,27 (-0,45)

• • Cash flow from operating activities KSEK -8,364 (-2,016)

Financial resultats full year

• • Number of Hövding helmets sold full year 2020 increased to 96,560 (71,555) (+35%)

• • Net sales of KSEK increased to 152,517 (112,919) (+35%)

• • Gross margin of 23% (26%)

• • EBITDA of KSEK -38,558 (-48,328)

• • Result after tax KSEK -44,247 (-50,928)

• • Result per share SEK -1,82 (-2,29)

• • Cash flow from operating activities KSEK -43,160 (-32,805)

Operating profit includes an item relating to restructuring costs of 3,750 KSEK of a non-recurring nature.

Net sales, KSEK EBITDA, KSEK Net income, KSEK Earnings per share, SEK

Cash flow from operating activities, KSEK

OCT - DEC 2020 2019

%JAN - DEC 2020 2019

52 759

46 467

• +13,5 152 517

  -5 708

  -9 229

• +38,2 -38 558

  -7 387

  -10 137

• +27,1 -44 247

  -0,27

  %

  112 919 +35,1

  -48 328 +20,2

  -50 928 +13,1

  -0,45

  +41,3

  -1,82

  -8 364

  -2 016

• -314,8 -43 160

-2,29 +20,6

-32 805 -31,6

Kvartalsvis nettoomsättning och EBITDA rullande 12 månader

QUARTERLY NET SALES AND EBITDA 12 MONTHS ROLLING

Q1 Q2

Q3 Q4

Q1 Q2

Q3 Q4

Q1 Q2

Q3 Q4

Q1 Q2 2018 Q3 Q4

Q1 Q2 2019 Q3 Q4

Q1 Q2 2020 Q3 Q4

2018

Nettoomsättning mkr

2019

EBITDA % (exkl. omstruktureringskostnader)

2020

104 107 113 114 146 119 93 96 85 70 56	153
-26% -23% -43% -42% -38% -39% -43% -42% -51% -51% -48% -60%

Net sales SEKmEBITDA % (excl. restrucuring costs

1

HÖVDING ÅRSREDOVISNING 20191

Growth continued in 2020

The number of Hövding helmets sold during 2020 increased by 35% compared to prior year. Net sales increased by 35%.

As second half of 2019 was influenced by the launch of Hövding 3 and unnatural movements between quarters the comparing quarter by quarter in this and last quarter is challenging. Hence, we opera-tionally look at second half 2020 compared to prior year. We sum up a 51% net sales growth in the second half compared to modest 14% growth in first half.

This signals that we leave a very particular 2020 on a strong note. Demand is on good levels with sales in quarter four of 52,7mSEK. This is our biggest quarter to date and with the restructuring implemented during quarter three we are starting to tentatively see effect on our ebitda. Cleared of one-off restructuring cost ebitda is in quarter three and four at -6% and -11% respectively with a trend in the right direction. We still have work to be done and the area of gross margin is in particular focus. During spring we are implementing activities aimed at raising the average sales price, reducing cost of goods sold and lower the cost of warranties.

During the quarter we saw key international markets like Germany and Denmark returning to closer to expected levels with less direct negative effect of restrictions in consumer trading. Parallel to this Sweden continued to deliver well with known national partners such as Stadium, Outnorth, Design-torget etc. in the lead.

What unite all our key accounts, independent of country, is the possibility they see in making sales in an otherwise dormant period for cycling. It confirms Hövding's ability to attract consumer demand all year round.

We have now entered 2021 and look forward to continuing the trend of improved results.

It will remain a challenging year to plan given the pandemic and the operational restructuring imple-mented and lower fixed costs gives us better abilities to adapt our plans according to on one hand restrictions in the market and on the other hand a continued trend in increased urban cycling.

The plan being implemented is; continued cost control, step by step improved gross margins coupled with growth in the three key markets. In addition, we will more actively pursue new geographical markets in Europe where we know smart solutions for urban cyclists is in high demand. In this work we consider the fact that up to half of all Hövding's today are online purchases. Entering new markets will be a combination of both physical sales and online sales. Physical presence to complement a digital sales strategy rather than the other way around.

With 300 000 Hövding's in the streets, in Sweden, Denmark and Germany alone, we have a real foothold. During quarter four a new Hövding user took to the street every 4th minute, 24/7. We see no trend of this slowing down. Instead we look forward to adding many saved lives to the thousands already protected by Hövding, eight times better than with traditional helmets.

Fredrik Carling, CEO

Hövding Sverige AB (publ)

Sales and results

• • Net sales for the period was KSEK 52,759 (46,467).

The number of helmets sold during the period reached 33,853 (28,551). Of these, 32% (29%) were sold through wholesalers, 64% (66%) through retailers and 4% (5%) through the company website. Sales share by country shows Sweden 32% (32%), Denmark 34% (37%), Germany 26% (28%), the UK 2% (1%) and for other countries 6% (2%).

The gross margin for the period amounts to 24% (22%). The gross margin is mainly affected by production costs at 80,6% (83%), transport and customs at 4,4% (6%), write-down 0,5% (0%) and warranty costs for helmets sold at 14,5% (11%).

Our business expenses during the period reached KSEK 18,475 (19,936). Among the expenses, KSEK 10,045 (10,272) denotes external costs, and KSEK 8,430 (9,664) refers to personnel costs.

EBITDA for the quarter was KSEK -5,708 (-9,229). Profit for the period before tax amounted to KSEK -7,387 (-10,137) having been burdened by write-offs and devaluations of intangible assets at KSEK -1,447 (-794) and tangible assets at KSEK -165 (-186).

Significant events during the period

Redemption of share warrants

During the period, redemption of a share warrant program for the employees took place. The warrants were subscribed for in the autumn of 2017. Holders of the warrants were offered to buy 1.48 shares per option for the price of SEK 21.55. The subscription was completed on October 31, 2020 and provided the company with KSEK 4.448 before issue costs.

Investments

No significant investments were made during the quarter.

Liquidity and financing

During the period, redemption of a share warrant program for the employees took place, which provided the company with KSEK 4,448 before issue costs. The liquidity of the company at the end of the period amounted to KSEK 62,024 (20,353). Cash flow from the ongoing operations during the period amounted to KSEK -8,364 (-2,016).

The Board of Directors proposal for appropriations of the company's profit or loss

The Board of Directors does not propose a dividend for the financial year.

Employees

As per 31 December 2020 the number of employees was 35 (41).

Risk factors

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

Certified Advisers

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

• • May 2021 - Interim report Quarter 1 2021

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: 040 - [e-mail]

Hövding Sverige AB (publ) Bergsgatan 33 214 22 Malmö + 46 40 236868

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)

Helen Richenzhagen

Tony GrimaldiAlexander Izosimov

Maria MinskovaFredrik 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 22 February 2021 at 08.30am CET.