Kid ASA

Investor Presentation • May 19, 2022

Kid ASA 19 May 2022

Q1 2022

Presentation available at investor.kid.no

First quarter in brief

• Group revenues¹ increased by 9.3% (10.4%) and LFL¹ by 7.3% (9.3%)
• Gross margin increased by 0.2 percentage points despite increased freight costs and increased costs of raw materials
• EBITDA decreased by MNOK 2.3 to MNOK 110.4, mainly due to one-off Covid-19 cost reduction effects last year
• 8 th consecutive quarter with year-on-year increased Earnings Per Share
• Group revenues¹ were up by 14.4% in April and by 10.6% year-to-date per April compared to the same period last year

Operational focus in Q1

• Earlier deliveries of goods to mitigate risk of delays
• Maintained focus on deliveries going forward, with earlier delivery schedules on autumn collections now expected to arrive in July (normally August)
• Signed agreement with Element Logic to install Autostore inventory automation in the new warehouse in Sweden
• 52% (40%) of our assortment in 2021 was labelled "act with the heart" which contributes to a positive impact on both people and planet
• Kid will set Science Based Targets to reduce climate emissions according to the Paris Agreement

Revenues Q1 2022

Group revenues increased by 9.3%¹ (10.4%¹ )

• Group like-for-like revenues increased by 7.3% (9.3%) including online sales
• Last year's COVID-19 restrictions with temporary store closures, as well as the timing of Easter, make comparison against last year challenging
• Kid Interior revenue growth of 12.5% (13.6%)
  • Like-for-like growth of 10.7% (10.3%) including online sales
  • Online sales decline of -0.3% to MNOK 31.7 (MNOK 31.8)
• Hemtex revenues increased by 4.8% (6.4%) in local currency

4

Kid ASA Q1 2022

• Reported revenues including FX-effects decreased by -2.4%
• Like-for-like growth of 2.0% (7.8%) including online sales
• Online sales decline of -16.4% to MSEK 38.7 (MSEK 46.3).

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

¹ Calculated in constant currency. Actual reported revenues in Q1 2021 was MNOK 569.8 which corresponds to an increase of 6.1%.

Gross margin

Increased gross margin in Q1 Group gross margins

• Group gross margin was 61.2 % for the quarter, up by 0.2 pp compared to Q1 2021 despite increased freight costs and increased costs of raw materials
• Kid Interior increased gross margin by 0.3 pp to 61.4% (61.1%)
• Hemtex had a stable gross margin of 61.0% (61.0%)

EBITDA

EBITDA of 110.4 (112.7) in Q1 EBITDA Q1 2022 vs. 2021

• EBITDA decreased by MNOK 2.3 to MNOK 110.4
  • Cost increase of MNOK 9.7 related to bonus provision reversal of MNOK 1.6 (MNOK 5.4) and less Covid-19 related cost reduction effects of MNOK 1.3 (MNOK 7.2)
  • Increased OPEX due to planned marketing increase, logistics activity, HQ salaries and general costs increases from electricity and IT-costs
  • OPEX-to-sales of 55.5% (55.6%) when adding back Covid-19 related cost reduction effects
• Kid Interior EBITDA of MNOK 75.9 (MNOK 69.9)
  • Increased OPEX related to logistics activity, planned marketing and IT
  • Cost increase of MNOK 8.5 related to bonus provision reversal of MNOK 1.6 (MNOK 5.4) and estimated COVID-19 cost saving effects of MNOK 0 (MNOK 4.7)
• Hemtex EBITDA of MNOK 34.5 (MNOK 42.8)
  • Increased OPEX related to logistics activity and planned marketing
  • Cost increase of MNOK 1.2 because of a reduction in estimated COVID-19 cost saving effects of MNOK 1.3 (MNOK 2.5)
  • Hemtex EBITDA reduced by MNOK 2.2 compared with Q1 last year because of FX

Cash flow

(Amounts million) in NOK	Q1 2022	Q1 2021	FY 2021
cash flow from Net operations	-191,6	-105,8	673,7
Cash flow from investments Net	-38,1	-13,6	-92,6
cash flow from financing Net	-5,5	-84,9	-643,7
change cash and cash equivalents Net in	-235,3	-204,4	-62,6
Cash and cash equivalents the beginning of the period at	239,3	301,3	301,3
(losses) Exchange gains / on cash and cash equivalents	-4,1	-5,5	0,7
of Cash and cash equivalents the end the period at	0,0	91,4	239,3

Working Capital

(Amounts million) in NOK	Q1 2022	Q1 2021	FY 2021
Change in inventory	-84,2	-64,3	-180,3
Change trade debtors in	5,3	8,6	-4,4
Change in trade creditors	-28,8	10,5	71,2
¹ Change in other provisions	-135,4	-128,2	54,8
Change in working capital	-243,0	-173,5	-58,7

Solid financial position and liquidity

• Cash flow from operations decreased by MNOK 85.8 compared to Q1 2022
  • Negative cash effect from increased tax payments of MNOK 13
  • Negative cash effect from increased inventory of MNOK 20 as a result of earlier deliveries, increased number of stores and product categories expansion.
  • Negative cash effect from decreased Trade Creditors of MNOK 38 mainly caused by delayed rental and supplier payments in Hemtex at year-end due technical issues at Nordea Sweden
• Cash flow from investments reflects CAPEX in stores and new online platform, and MNOK 22.5 in new warehouse Sweden
• Cash flow from financing includes repayment of RCF of MNOK 65.1 and use of overdraft facility of MNOK 138.3
• Gearing ratio, excl. IFRS16 effects, of 1.06x (0.75x)
• Net interest-bearing debt excl. IFRS16 leasing liabilities of MNOK 620.0 (MNOK 422.2)
• Cash and available credit facilities of MNOK 338.7 (MNOK 468.4) by the end of the quarter

Growth strategy

OMNICHANNEL

New joint online platform launched in 2021

Improve utilization of customer club and insights

New multi channel sales initiatives

______________________________
STORE NETWORK

STORE NETWORK

Maintain an optimized store portfolio of up to 320 stores

Expansion plan for Finland and Estonia

COST EFFICIENCY:

Cost and working capital control Continued integration and realisation of synergies

Category development and expansion

Category expansion is driving growth

• Categories launched since 2017 added 257 MNOK in revenues during 2021
• These categories include kitchen accessories, lamps, lightning and outdoor furniture
• Kid increased the staffing of the category development department in 2018 and in 2021 to fuel this growth
• A selection of furniture and large carpets launched in Q1-
• Some new categories are currently available only online and in selected stores due to lack of space

Revenue from new categories (MNOK)

SEKNOK=1

Category development and expansion

Store portfolio optimization

• Current categories and products needs at least 600 sqm to be displayed in physical stores.
• The store size of the current store portfolio is based on historical categories and concepts
• After expanding the assortment in recent years, Kid will target an increased store size going forward by expand and/or relocate current stores in all markets

Expanding store size 2021 revenue and contribution per store size*

Revenue per store Store contribution per store

*2021 | MNOK | SEKNOK=1 | Stores open per 1.1-31.12.21 | Store contribution = EBITDA excl. IFRS16, allocation of central marketing and HQ costs | SQM is rented space including shop floor, stock storage, office, etc.

Store portfolio optimization

Alignment of concepts based on Kid Interior Store size per segment*

• Hemtex was acquired in May 2019, and had a smaller store concept and assortment compared to Kid Interior
• Introduction of new categories from Kid Interior have proven successful in Hemtex. Further category expansion is limited due to lack of available store space
• New warehouse in Sweden is expected to open Q2- 23 and will enable equal assortment availability
• Kid ASA will target an equal assortment and store size in all markets to streamline the concept and drive further growth

*2021 | MNOK | SEKNOK=1 | Stores open per 1.1-31.12.21 | SQM is rented space including shop floor, stock storage, office, etc.

Store portfolio optimization

Refurbishment of stores

• 8 Hemtex stores and 6 Kid Interior stores were refurbished with our newest store concept in 2020 and outperformed the remaining store portfolio (see figure)
• 26 Hemtex stores has been upgraded to Kid store concept as per 31.12.2021. Compounded annual growth from 2019 to 2021 was 7.9 % for these stores compared to 3.4 % for remaining like-for-like stores
• Kid ASA will ramp up the store investment program going forward and increase the CAPEX to MNOK 100 on an annual basis to support expansion, refurbishment and relocation of stores

Compounded annual growth, 2019-2021

13 Kid ASA Q1 2022 * Like-for-like stores excl. refurbished and relocated stores in 2019-2021

Number of stores per quarter end

Store portfolio expansion

Store expansion plan

• Current store portfolio consist of 272 fully owned stores across the Nordics
• Payback time* including CAPEX and inventory buildup for the 10 stores opened in 2019 and 2020 was approximately 17 months
• Potential to expand the store portfolio further in all markets with a target of 320 stores
• Capex for a new store opening in the range of MNOK 2

Financial Objectives

Number of stores per quarter end

Store portfolio activity

	Completed year to date	Signed, but not yet completed
New stores	NO: Skøyen (5 May 2022)	NO: Kolbotn (Q2 22) NO: Ullevål (Q4 22) NO: Grünerløkka (Q4 23) NO: Fredrikstad (Q4 23)
Closures	SE: 2 stores	SE: 1 store
Relocations	SE: 3 stores	NO: 7 stores SE: 4 stores
Refurbishment	NO: 5 stores SE: 1 store	NO: 5 stores SE: 3 stores

Segment: Kid Interior

(Amounts millions) in NOK	Q1 2022	Q1 2021	FY 2021
Revenue	366 8 ,	326 ,1	883 1 ,5
growth Revenue	% 12,5	13,6 %	% 1,1
growth including online sales LFL	% 10,7	% 10,3	-1,8%
COGS	-141,7	-126 ,9	-702,3
profit Gross	225,0	199,2	181 1 ,2
(%) Gross margin	61 % ,4	61 % ,1	62 % ,7
Other operating revenue	0,1	0,5	0,5
Employee benefits expense	-94,2	-80 8 ,	-367 ,2
Other operating expense	-97,6	-89 ,3	-395,9
Other effect operating - IFRS 16 expense	42,6	40,3	159,8
EBITDA	75,9	69 ,9	578 ,5
(%) EBITDA margin	% 20,7	% 21,4	% 30,7
. of shopping days No	76	77	308
. of physical period end No stores at	153	148	153

Segment: Hemtex

(Amounts millions) in NOK	Q1 2022	Q1 2021	FY 2021
Revenue	237,8	243,7	213,6 1
growth Revenue ¹	4,8 %	6 % ,4	% 10,1
¹ growth including online sales LFL	% 2,0	7,8 %	9,8 %
COGS	-92,8	-95,2	-457,2
profit Gross	145,1	148 6 ,	756 ,4
(%) margin Gross	61 % ,0	61 % ,0	62 % ,3
Other operating revenue	0,7	0,8	9,5
Employee benefits expense	-59,0	-59,2	-250,0
Other operating expense	-83 6 ,	-80 ,3	-343,9
Other effect operating - IFRS 16 expense	31,3	32,9	127,2
EBITDA	34,5	42,8	299,1
(%) EBITDA margin	% 14,5	% 17,5	% 24,5
. of shopping days No	89	89	363
(excl franchise) . of physical period end No stores at	119	117	121

19 ¹ Calculated in local currency Kid ASA Q1 2022

Income statement

(Amounts thousand) in NOK	Q1 2022	Q1 2021	FY 2021
Revenue	604 6 ,	569 8 ,	3 097,1
COGS	-234,5	-222,0	-1 159,5
profit Gross	370,1	347,8	937,6 1
(%) Gross margin	61 % ,2	61 % ,0	62 6 % ,
Other operating revenue	0,7	1,3	10,0
OPEX	-260 ,4	-236 ,4	-1 070,0
EBITDA	110,4	112,7	877 6 ,
(%) margin EBITDA	18 % ,2	% 19,7	28 % ,2
Depreciation and amortisation	-86 ,7	-83 ,0	-336 ,4
EBIT	23,7	29,7	541,2
(%) margin EBIT	% 3,9	% 5,2	% 17,4
finance Net	-11,6	-24,3	-56 ,0
Share of result from joint ventures	-0,7	0,0	0,0
Profit before tax	11,5	5,3	485 ,2
profit Net	8 ,7	3,8	384 ,4

Statement of financial position

(Amounts NOK thousand) in	Note	31.03.2022	31.03.2021	31.12.2021
Assets		Unaudited	Unaudited	Audited
Goodwill	9	65 070	67 626	70 286
Trademark	9	1 509 908	1 511 885	1 511 788
Other intangible assets	9	20 696	6 662	19 096
Deferred tax asset		9 650	7 656	22 968
Total intangible assets		1 605 324	1 593 830	1 624 140
of Right use asset	9	737 738	743 412	756 941
and fittings, tools, office machinery and Fixtures equipment	9	194 299	199 170	203 158
Total tangible assets		932 037	942 582	960 099
Investments in associated companies and joint ventures	10	0	0	30
Loans to associated and companies joint ventures	10	22 500	0	0
Total financial fixed assets		22 500	0	30
Total fixed assets		2 559 860	2 536 411	2 584 268
Inventories		722 188	531 425	646 764
Trade receivables		16 196	9 148	21 999
Other receivables		35 372	51 336	25 020
Derivatives		37 529	2 091	17 439
Totalt receivables		89 097	62 576	64 458
Cash and bank deposits		0	91 441	239 331
Total currents assets		811 285	685 442	950 553
Total assets		3 371 145	3 221 853	3 534 821

(Amounts NOK thousand) in	Note 31.03.2022	31.03.2021	31.12.2021
Equity and liabilities	Unaudited	Unaudited	Audited
Share
capital	48	48 770 770	48 770
Share premium	321 050	321 050	321 050
Other paid-in-equity		64 617 64 617	64 617
Total paid-in-equity	434 440	434 437	434 437
Other equity	833	785 403 527	828 223
Total equity	1 267 843	1 219 964	1 262 660
Deferred tax	322 554	316 777	332 280
Total provisions	322 554	316 777	332 280
Lease liabilities	500 315	511 601	517 550
Liabilities to financial institutions	6 451 633	453 467	451 628
Total long-term liabilities	951 948	965 068	969 177
Lease liabilities	248	612 249 333	249 737
to financial Liabilities institutions	6 168	60 170 331	95 000
Trade payable	127 589	100 025	159 751
Tax payable	45 992	61 262	90 335
Public duties payable	96 383	102 842	172 851
Other short-term liabilities	131 874	119 034	197 865
Derivatives		27 378 10 019	5 166
Total short-term liabilities	828 801	720 043	970 705
Total liabilities	2 103 303	2 001 888	2 272 162
Total equity and liabilities	3 371 145	3 221 853	3 534 821

Allocated segment costs

Segment allocated 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 and Kid Interior ASA allocated employee Segment benefits expense allocated other Segment operating expense	3,3 0,6	0,8 1,7		5,2 1,0		3,6 1,3		6 ,1 2,6	3,3 0,6	15,6 6 ,5
Hemtex
allocated employee Segment benefits expense	-3,3	-0,8		-5,2		-3,6		-6 ,1	-3,3	-15,6
allocated other Segment operating expense	-0,6	-1,7		-1,0		-1,3		-2,6	-0,6	-6 ,5

Quarterly revenue growth

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

Hemtex
Total growth
Year	Q1	Q2	Q3	Q4
2020	6,6 %	14,7 %	-3,7%	-5,7 %
2021	6,4%	7,7 %	17,4 %	9,0 %
2022	4,8%
Like-for-like growth
Year	Q1	Q2	Q3	Q4
2020	7,9%	18,0 %	9,2 %	-1,9 %
2021	7,8%	9,8 %	14,6 %	7,8 %
2022	2,0 %

Sales days and stores

Kid Interior Hemtex

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				76	2022	89				89

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	1 1	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				0	New stores	0				0
Closed stores	0				0	Closed stores	2				2
Relocated stores	0				0	Relocated stores	3				3
Refurbished stores	5				5	Refurbished stores	1				1
Total number of stores	153					Total number of stores* 130
Total number of LFL stores	147					Total number of stores* LFL	126

Number of sales days Number of sales days

Year	Q1	Q2	Q3	Q4	Total
2021	89	go	92	91	362
2022	89				89

Number of store projects Number of store projects

2021	Q1	Q2	Q3	Q4	Total
New stores	0	1	2	1	4
Closed stores	2	O	0	O	2
Relocated stores	O	O	1	1	2
Refurbished stores	3	4	0	2	9
Total number of stores*	129	130	132	133
2022	Q1	Q2	Q3	Q4	Total
New stores	0				0
Closed stores	2				2
Relocated stores	3				3
Refurbished stores	1				1
Total number of stores*	130
Total number of LFL stores*	126

*incl franchise stores