Kid ASA

Earnings Release • Feb 16, 2023

Financial Summary

Fourth quarter in brief

• Group revenues1 increased by 2.1% (2.5%). LFL revenues increased by 1.8% (0.2%) • Gross margin decreased by -6.5 percentage points
• Online growth of +18.2%
• Challenging retail market in all segments
• • Mainly caused by increased freight costs without corresponding price adjustments
  • More availability of campaign products and increased discounting compared with same quarter last year
• • Increased general expenses, especially electricity, offset by lower bonus provisions
• EPS of NOK 3.91 (5.39)
• Inventory reduced according to plan contributing to a very strong quarterly cashflow

Operational focus in Q4

• Promising launch of Kid Extended in first pilot store and online during Q4. Five Kid Extended stores will be launched in Norway by the end of Q2 2023. The gross margin for new categories in line with expectation (35-40%) including logistics and last-mile distribution MNOK 136.1¹ • Our growth strategy in Finland and Estonia remains. During Q4, one
• New categories remain a key growth driver. Revenues from new categories launched during or after 2017 increased by 27.6% to
• new store opened in Estonia and one store was expanded in Finland.
• Based on our CO2 roadmap, we have submitted reduction targets to the Science Based Target Initiative.

Full year financial summary

• • Like-for-like growth of 3.1 %
• Online growth of 12.1 %, representing 10.8 % (10.2%2 total revenues
• freight cost that was not incorporated in our price calculation model
• OPEX (excluding IFRS 16) to sales margin of 44.9% (43.8%)
• EBITDA (excluding IFRS 16) reduced by MNOK -165, mainly driven by the drop in gross margin
• Full-year dividend of NOK 5.50 per share (incl. pre-payment of NOK 2.50 in December 2022), equivalent to a pay-out ratio of 90%

Revenues

Group revenues Q4 increased by 2.1%¹ (2.5%¹ )

Revenues (MNOK) Group like-for-like growth (%)

• Group like-for-like revenues increased by +1.8% (+0.2%) including online sales
• Reduction in footfall to physical stores in October and November, but increase in footfall in December
• 16,6%
• Positive development in new categories
• Kid Interior revenue growth of 2.3% (-1.0%)
• Like-for-like increase of +0.9% (-3.8%) including online sales
• Online sales increase of 23.9%

• Hemtex revenue growth of 1.7% (9.0%) in local currency

• Online sales increase of 12.6%

• Reported revenues including FX-effects decreased by -1.9%

5

Kid ASA Q4 2022 ¹ Calculated in constant currency. Actual reported revenues in Q4 2021 was MNOK 1,100.5 which corresponds to an increase of +0.7%.

Gross margin

Gross margin negatively affected by freight costs and rebating Group gross margins

• Group gross margin was 56.9 % for the quarter, down by 6.5 pp compared to Q4 2021 • Hemtex decreased gross margin by -8.8 pp to 54.7% (63.5%) • Reduction of gross margin mainly caused by increased freight costs
• Kid Interior decreased gross margin by -5.3 pp to 58.1% (63.4%)
• without corresponding price adjustments
• More availability of campaign products and increased discounting compared with same quarter last year
• Financial Objective of stable gross margin in line with the past 10 years remains unchanged for 2023
• Freight spot rates currently decreasing towards pre-Covid levels
• Actions implemented to secure normalized margins for future purchases

EBITDA

EBITDA of 296.8 (372.7) in Q4 EBITDA Q4 2022 vs. Q4 2021

• EBITDA decreased by MNOK 75.9 to MNOK 296.8
• Increased Other operating expenses of MNOK 13.2 excluding IFRS16 effects due to increased rental costs, general costs increases from electricity and increased logistics costs following higher inventory levels
• Decreased Employee benefit expenses of MNOK -9.7 mainly due to lower bonus provisions
• Covid-19 related cost reduction effects of MNOK 0 (MNOK 2.9)
• OPEX-to-sales of 36.7% (36.9%) when adding back Covid-19 related cost reduction effects
• OPEX-to-sales (excluding IFRS 16) on a full-year basis was 44.9% (43,8%)
• Kid Interior EBITDA of MNOK 208.0 (MNOK 242.9)
• Increased OPEX mainly related to increased shared operating costs, net new stores, rental index adjustments on LFL-stores and increased cost of HQ staff. OPEX offset by lower bonus provisions
• Hemtex EBITDA of MNOK 88.8 (MNOK 129.7)
• Reduced OPEX following lower costs of HQ and lower bonus provisions. Increased third-party logistics activity following higher volumes and increased rental costs
• Weakened SEK/NOK FX rates reduced the Hemtex EBITDA by MNOK -3.3 compared to Q4 last year

Cash flow

Cash flow
(Amounts in NOK million)	Q4 2022	Q4 2021	FY 2022	FY 2021
Net cash flow from operations	581,8	464,2	547,9	673,7
Net Cash flow from investments	-57,5	-23,8	-143,1	-92,6
Net cash flow from financing	-449,5	-293,3	-569,1	-643,7
Net change in cash and cash equivalents	74,9	147,1	-164,3	-62,6	systems of MNOK 8.4
Cash and cash equivalents at the beginning of the period	6,5	93,0	239,3	301,3	bank overdraft facility
Exchange gains / (losses) on cash and cash equivalents	-5,6	-0,8	0,7	0,7	Gearing ratio, excl. IFRS16 effects, of 1.12x (0.52x)
Cash and cash equivalents at the end of the period	75,7	239,3	75,7	239,3	•
Working Capital					475.9 (MNOK 307.3)
(Amounts in NOK million)	Q4 2022	Q4 2021	FY 2022	FY 2021
Change in inventory	199,2	-66,5	-29,2	-180,3
Change in trade debtors	3,8	-7,4	9,1	-4,4	Positive effects from Working capital changes •
Change in trade creditors	9,0	81,7	-34,3	71,2
Change in other provisions ¹	89,4	128,9	39,3	54,8
	301,4	136,7	-15,1	-58,7
Change in working capital
					compared to Q4 2021

Working Capital

(Amounts in NOK million)

Satisfactory financial position and liquidity

• Cash flow from operations increased by MNOK 117.6 compared to Q4 2021 mainly because of inventory reduction during the quarter
• Cash flow from investments reflects CAPEX in stores and new online platform of MNOK 33.3, investment in the new warehouse in Sweden of MNOK 15.8 and technical infrastructure and back-office systems of MNOK 8.4
• Cash flow from financing influenced by down payment of RCF and bank overdraft facility
• Gearing ratio, excl. IFRS16 effects, of 1.12x (0.52x)
• Net interest-bearing debt excl. IFRS16 leasing liabilities of MNOK 475.9 (MNOK 307.3)
• Cash and available credit facilities of MNOK 552.7 (MNOK 651.3) including a new MNOK 100 short term facility agreed in December
• Positive effects from Working capital changes
• Inventory build-down in Q4 2022
• Trade creditors was unusually high last year due to rental payments delayed from Q4 2021 to Q1 2022
• Other provisions reduced due to lower bonus provisions in Q4 2022 compared to Q4 2021

Dividend

Payout ratio 90%

• The Board of Directors will propose to the Annual General Meeting a dividend of NOK 3.00 share to be paid 26 May 2023
• Including dividend pre-payment of NOK 2.50 in November 2022, the ordinary dividends for 2022 is NOK 5.50, i.e. a pay-out ratio of 90% which is at the same level as last year
• The proposed pay-out details are:
• Last day including right: 11 May 2023
• Ex-date: 12 May 2023
• Record date: 15 May 2023
• Payment date: 26 May 2023
• Date of approval: 11 May 2023 (Annual General Meeting)
• Kid's dividend policy remains unchanged with a target of 80-100 percent dividend pay-out ratio with semi-annual payments. The distribution policy is dynamic, and any excess capital will be returned to shareholders

Dividend per share (DPS) and Adj1 Earnings per share (EPS)

¹ Excluding Transaction and Integration costs

New stores Closures NO: Skøyen NO: Kolbotn Torg NO: Ullevål SE: Port 73 Haninge EST: Kristiine Keskus, Tallin Relocations Refurbishment/ expansion NO: 6 stores SE: 7 stores FI: 1 store NO: 9 stores SE: 7 stores FI: 1 store EST: 1 store SE: 4 stores

Store portfolio activity

10 Kid ASA Q4 2022 Number of stores per quarter end

Outlook

• The construction of our new warehouse in Sweden is progressing as planned and we expect to be fully operative in May. Logistics operation to be relocated during March and April
• Continued piloting of Kid Extended as planned
• launched in Norway during Q2 2023
• A large proportion of the extended assortment was available during Q4 2022, and additional products will be introduced throughout 2023
• Freight costs have been materially reduced on shipments arriving in the beginning of 2023 onwards, and we expect a gradual margin improvement during 2023
• Due to unusual high inflation in all our markets during 2022, the store and
• Focus on improving our market position in a challenging macro environment

Growth strategy

Cost and working capital control Continued integration and realisation of synergies

14 Kid ASA Q3 2022

Segment: Kid Interior

Segment: Kid Interior
(Amounts in NOK millions)	Q4 2022	Q4 2021	FY 2022	FY 2021
Revenue Revenue growth	703,4 2,3 %	687,4 -1,0%	1 983,6 5,3 %	1 883,5 1,1 %
LFL growth including online sales	0,9 %	-3,8%	3,2 %	-1,8%
COGS	-294,7	-251,9	-828,0	-702,3
Gross profit	408,7	435,5	1 155,6	1 181,2
Gross margin (%)	58,1 %	63,4 %	58,3 %	62,7 %
Other operating revenue	0,0	0,0	0,1	0,5
Employee benefits expense	-114,8	-116,7	-392,2	-367,2
Other operating expense	-127,2	-115,8	-434,4	-395,9
Other operating expense - IFRS 16 effect	41,3	39,9	168,7	159,8
EBITDA	208,0	242,9	497,9	578,5
EBITDA margin (%)	29,6 %	35,3 %	25,1 %	30,7 %
No. of shopping days	81	81	308	308
No. of physical stores at period end	156	153	156	153
15 Kid ASA Q4 2022

Segment: Hemtex

Segment: Hemtex
(Amounts in NOK millions)	Q4 2022	Q4 2021	FY 2022	FY 2021
Revenue	405,2	413,0	1 194,4	1 213,6
Revenue growth ¹	1,7 %	9,0 %	3,2 %	10,1 %
LFL growth including online sales ¹	3,5 %	7,8 %	2,8 %	9,8 %
COGS	-183,4	-150,6	-503,6	-457,2
Gross profit	221,8	262,4	690,8	756,4
Gross margin (%)	54,7 %	63,5 %	57,8 %	62,3 %
Other operating revenue Employee benefits expense	1,2 -61,6	6,2 -69,3	5,1 -237,6	9,5 -250,0
Other operating expense	-103,3	-100,8	-361,3	-343,9
Other operating expense - IFRS 16 effect	30,7	31,3	122,6	127,2
EBITDA	88,8	129,7	219,7	299,1
EBITDA margin (%)	21,8 %	30,9 %	18,3 %	24,5 %
No. of shopping days	91	91	362	362
No. of physical stores at period end (excl. franchise)	119	121	119	121
¹ Calculated in local currency 16 Kid ASA Q4 2022

Income statement

Income statement
Gross profit 630,4 697,9 1 846,4 1 937,6
Gross margin (%) 56,9 % 63,4 % 58,1 % 62,6 %
Other operating revenue 1,2 6,2 5,2 10,0
OPEX -334,9 -331,4 -1 134,1 -1 070,0
EBITDA 296,8 372,7 717,5 877,6
EBITDA margin (%) 26,7 % 33,7 % 22,5 % 28,2 %
Depreciation and amortisation -87,4 -85,6 -348,3 -336,4
EBIT 209,4 287,1 369,2 541,2
EBIT margin (%) 18,9 % 25,9 % 11,6 % 17,4 %
Net finance -12,8 -11,7 -47,5 -56,0
Share of result from joint ventures 1,6 0,0 -2,8 0,0
Profit before tax 198,2 275,3 318,9 485,2
Net profit 159,0 219,1 249,2 384,4
17 Kid ASA Q4 2022

Statement of financial position

			Statement of financial position
(Amounts in NOK thousand)	Note 31.12.2022	31.12.2021
Assets	Unaudited	Audited
Goodwill	9 65 479	70 286
Trademark	9 1 510 224	1 511 788
Other intangible assets	9 35 326	19 096
Deferred tax asset	4 344	22 968
Total intangible assets	1 615 373	1 624 140
Right of use asset	9 760 734	756 941
Fixtures and fittings, tools, office machinery and equipment	9 237 245	203 158
Total tangible assets	997 979	960 099
Investments in associated companies and joint ventures	10 0	30
Loans to associated companies and joint ventures	10 23 795	0
Total financial fixed assets	23 795	30
Total fixed assets	2 637 148	2 584 268
Inventories	668 753	646 764
Trade receivables	12 094	21 999
Other receivables	32 756	25 023
Derivatives	59 449	17 439
Totalt receivables	104 299	64 461
	75 721	239 331
Cash and bank deposits		950 556
Total currents assets	848 774

(Amounts in NOK thousand)	Note	31.12.2022	31.12.2021
Equity and liabilities		Unaudited	Audited
Share capital		48 770	48 770
Share premium		321 050	321 050
Other paid-in-equity		64 617	64 617
Total paid-in-equity		434 440	434 440
Other equity		838 940	828 223
Total equity		1 273 380	1 262 663
Deferred tax		322 723	332 280
Total provisions		322 723	332 280
Lease liabilities		523 528	517 550
Liabilities to financial institutions	6	521 646	451 628
Total long-term liabilities		1 045 175	969 177
Lease liabilities		258 257	249 737
Liabilities to financial institutions	6	30 000	95 000
Trade payable		122 459 57 745	159 751 90 335
		167 139	172 851
Tax payable		201 815	197 865
Public duties payable			5 166
Other short-term liabilities
Derivatives Total short-term liabilities		7 229 844 644	970 705
Total liabilities Total equity and liabilities		2 212 542 3 485 922	2 272 162 3 534 824

Allocated segment costs

Total year Total year (MNOK) Q1 2022 Q1 2021 Q2 2022 Q2 2021 Q3 2022 Q3 2021 Q4 2022 Q4 2021 2022 2021 Kid ASA and Kid Interior Segment allocated employee 3,3 0,8 4,0 5,2 4,0 3,6 3,9 6,1 15,2 15,6 benefits expense Segment allocated other operating 0,6 1,7 0,6 1,0 0,5 1,3 0,5 2,6 2,1 6,5 expense Hemtex Segment allocated employee -3,3 -0,8 -4,0 -5,2 -4,0 -3,6 -3,9 -6,1 -15,2 -15,6 benefits expense
expense	Segment allocated other operating	-0,6	-1,7	-0,6	-1,0	-0,5	-1,3	-0,5	-2,6	-2,1	-6,5

Quarterly revenue growth

Quarterly revenue growth
Kid Interior Hemtex
Total growth Total growth
Year Q2 Q4 Year Q2 Q1 Q3 Q1 Q3	Q4
2020 -3,6 % 28,0 % 22,1 % 15,3 % 2020 6,6 % 14,7 % -3,7 %	-5,7 %
2021 13,6 % 1,7 % -3,9 % -1,0 % 2021 6,4 % 7,7 % 17,4 %	9,0 %
2022 12,5 % 8,9 % 1,4 % 2,3 % 2022 4,8 % 8,8 % -1,0 %	1,7 %
Like-for-like growth Like-for-like growth
Year Q2 Q4 Year Q2 Q1 Q3 Q1 Q3	Q4
2020 -4,0 % 27,1 % 20,9 % 13,6 % 2020 7,9 % 18,0 % 9,2 %	-1,9 %
	7,8 %
2021 10,3 % -0,9 % -7,1 % -3,8 % 2021 7,8 % 9,8 % 14,6 % 2022 10,7 % 5,8 % -1,0 % 0,9 % 2022 2,0 % 5,2 % 0,8 %	3,5 %

Sales days and stores

						Sales days and stores
Kid Interior						Hemtex
Number of sales days						Number of sales days
Year	Q1	Q2	Q3	Q4	Total	Year	Q1	Q2	Q3	Q4	Total
Number of store projects						Number of store projects
2021	Q1	Q2	Q3	Q4	Total	2021	Q1	Q2	Q3	Q4	Total

						Sales days and stores
Kid Interior						Hemtex
Number of sales days						Number of sales days
Year	Q1	Q2	Q3	Q4	Total	Year	Q1	Q2	Q3	Q4	Total
2021	76	71	79	81	307	2021	89	90	92	91	362
2022	76	72	79	81	308	2022	89	90	92	91	362
Number of store projects						Number of store projects
2021	Q1	Q2	Q3	Q4	Total	2021	Q1	Q2	Q3	Q4	Total
New stores	1	1	0	4	6	New stores	0	1	2	1	4
Closed stores	0	0	0	0	0	Closed stores	2	0	0	0	2
Relocated stores	3	1	1	0	5	Relocated stores	0	0	1	1	2
Refurbished stores	2	4	2	3	11	Refurbished stores	3	4	0	2	9
Total number of stores	148	149	149	153		Total number of stores*	129	130	132	133
2022	Q1	Q2	Q3	Q4	Total	2022	Q1	Q2	Q3	Q4	Total
New stores	0	2	0	1	3	New stores	0	0	0	2	2
Closed stores	0	0	0	0	0	Closed stores	2	1	1	0	4
Relocated stores	0	1	2	3	6	Relocated stores	3	1	2	2	8
Refurbished stores	5	3	0	1	9	Refurbished stores	1	2	1	6	10
	153	155	155	156		Total number of stores*	130	129	128	130
Total number of stores

Year	O 1	O 2	Oз	O4	Total
2021	89	90	92	91	362
2022	89	90	Q 2	Q 1	362

Refurbished stores	2	4	2	3	11	Refurbished stores	3	4	0	2	9
Total number of stores	148	149	149	153		Total number of stores*	129	130	132	133
2022	Q1	Q2	Q3	Q4	Total	2022	Q1	Q2	Q3	Q4	Total
New stores	0	2	0	1	3	New stores	0	0	0	2	2
Closed stores	0	0	0	0	0	Closed stores	2	1	1	0	4
Relocated stores	0	1	2	3	6	Relocated stores	3	1	2	2	8
Refurbished stores	5	3	0	1	9	Refurbished stores	1	2	1	6	10
Total number of stores	153	155	155	156		Total number of stores*	130	129	128	130
Total number of LFL stores	147	147	147	147		Total number of LFL stores*	126	125	124	124