Cloetta — Interim / Quarterly Report 2022

Jul 15, 2022

Interim report April–June 2022

Q2

"Cloetta reports its sixth consecutive quarter of growth in Branded packaged products and continued profitable growth within Pick & mix, accompanied by improved profitability and important sustainability progress."

-Henri de Sauvage-Nolting, President and CEO

Interim report April–June 2022

Second quarter, April–June 2022

• Net sales for the quarter increased by 14.5 per cent to SEK 1,626m (1,420) including a positive impact from foreign exchange rates of 2.6 per cent.
• Sales of Branded packaged products increased organically by 8.2 per cent during the quarter.
• Sales of Pick & mix increased organically by 24.4 per cent during the quarter.
• Operating profit adjusted for items affecting comparability, amounted to SEK 162m (127). Operating loss amounted to SEK -61m (126), due to items affecting comparability of SEK -223m (–1) mainly related to impairments and provisions for the new greenfield facility.

Events during and after the end of the period

• Cloetta announced the plan to invest in a new greenfield facility in the Netherlands to enable growth and accelerate margin expansion.

• Cloetta has extended the maturities of its current loan facilities with the existing banking group by one year to 2024-2026.

• Operating profit, adjusted, of Branded packaged products amounted to SEK 154m (123).

• Operating profit, adjusted, of Pick & mix amounted to SEK 8m (4).
• Loss for the period amounted to SEK -94m (86), driven by items affecting comparability and unrealised exchange rate differences on cash and cash equivalents, which equates to basic and diluted earnings per share of SEK -0.33 (0.30).
• Cash flow from operating activities was SEK -78m (155), driven by increased inventories and inflation.
• Net debt/EBITDA ratio was 2.4x (2.9).
• Cloetta's climate targets have been approved by the Science Based Targets initiative.
• After the end of the quarter, the Board resolved on the repurchase of the company's own B-shares to enable delivery of shares under the long-term share-based incentive program.

Key ratios

		Second quarter			6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Change, %	Jan–Jun 2022	Jan–Jun 2021	Change, %	Jul 2021– Jun 2022	Jan–Dec 2021
Net sales	1,626	1,420	14.5¹	3,166	2,818	12.3¹	6,394	6,046
Operating profit, adjusted	162	127	27.6	320	234	36.8	657	571
Operating profit margin, adjusted %	10.0	8.9	1.1-pts	10.1	8.3	1.8-pts	10.3	9.4
Operating profit/loss (EBIT)	-61	126	n/a	93	229	-59.4	429	565
Operating profit margin (EBIT margin), %	-3.8	8.9	-12.7-pts	2.9	8.1	-5.2-pts	6.7	9.3
Profit/loss before tax	-128	109	n/a	39	232	-83.2	365	558
Profit/loss for the period	-94	86	n/a	37	189	-80.4	320	472
Earnings per share, basic and diluted, SEK	-0.33	0.30	n/a	0.13	0.66	-80.3	1.11	1.64
Net debt/EBITDA, x (Rolling 12 months)	2.4	2.9	-17.2	2.4	2.9	-17.2	2.4	2.0
Free cash flow	-136	102	n/a	-159	113	n/a	392	664
Cash flow from operating activities	-78	155	n/a	-51	209	n/a	598	858

1 Organic growth at constant exchange rates was 11.9 per cent for the quarter and 9.5 per cent for the first half of the year. See further under Net sales on page 4.

Double-digit growth and improved profitability

Cloetta reports its sixth consecutive quarter of growth in Branded packaged products and continued profitable growth within Pick & mix, accompanied by improved profitability and important sustainability progress.

Cloetta recorded yet another quarter of solid performance, where Branded packaged products delivered its sixth consecutive quarter of growth and our actions taken within the Pick & mix segment continued to support profitable growth. We also announced the plan to invest in a new greenfield facility in the Netherlands to position us for the future in terms of cost efficiency, capacity potential, and sustainability.

The first half of the year has been dominated by the terrible war in Ukraine, including how it has escalated cost inflation and global supply instability. We are on track with our previously communicated pricing, coming into effect during the quarter, and we have announced additional pricing that will become effective during the second half of the year. Furthermore, we have been able to manage the global supply chain challenges without any material disruption to our business, through swift actions on for example portfolio rationalisation and supplier collaboration.

Second quarter development

Sales for the quarter increased by 14.5 per cent, of which organic growth accounted for 11.9 per cent and exchange rate differences for 2.6 per cent. The increase in adjusted operating profit is attributable to higher volumes, favourable mix and pricing, partly offset by higher input costs. Leverage also improved compared to last year despite the higher dividend paid and increased working capital driven by seasonal inventory build-up and inflation.

Sales of Branded packaged products increased organically by 8.2 per cent, driven by pricing and continued roll-out of our premium product innovations. We also initiated further actions to grow sales within our pastille and gum categories.

Sales of Pick & mix increased organically by 24.4 per cent during the quarter and continued to be driven by our efforts to premiumise the offering, increased consumer activation as well as pricing. We also contin-

ued to prolong existing and sign new profitable Pick & mix contracts, which strengthens our confidence in the competitiveness of our offering.

As we strongly believe it is crucial to take environmental responsibility, also backed by global trends clearly showing that consumers and customers increasingly demand it, I am pleased to report that our climate targets have been approved by the Science Based Targets initiative. We will deliver on our targets by eliminating high-impact greenhouse gases from products and improving efficiency throughout our operations and supply chain.

New greenfield facility

Cloetta has an overall aim to deliver long-term shareholder value. In May, we announced the plan to invest in a new greenfield facility in the Netherlands. The plan has generated questions and comments within the investor community, and as a result we have decided to host an investor event during early fall. The event will allow enough time to share further information on the investment and its benefits to Cloetta and our shareholders, including details on timing, costs, financing, and future potential of the investment.

Already now, I do want to clarify that while the investment is significant, it includes headroom for the current uncertainties on interest rates and inflation, and will not be fully incremental to current investment levels. Furthermore, the investment will add another 15,000 tonnes of capacity within the candy category, whereof less than a third has been included in the estimated EBIT upside of SEK 160-180m per year. Finally, the Board reiterates that the dividend policy, with a payout ratio of 40 to 60 percent of profit after tax, remains intact.

The project is progressing and the consultations with the European Works Council and local unions are expected to be finalised during the third quarter. We are working closely with our banking group to determine the optimal financing solution. In the meantime, I am pleased to report that we now have extended the maturities of our current loan facilities by one year, at the same terms as initially agreed upon.

We are very pleased to deliver both top- and bottom-line growth through pricing, volume and mix.

In conclusion, operating in a non-cyclical market constitutes a solid foundation in uncertain times and we are very pleased with the strong business performance during the first half of the year. We will continue to successfully navigate this volatile market environment, with the overall goal to deliver long-term profitable growth.

Henri de Sauvage-Nolting President and CEO

Financial overview

Second quarter development

New greenfield facility

During the quarter Cloetta announced the plan to invest in a new greenfield facility in the Netherlands to enable growth, accelerate margin expansion and reduce greenhouse gas emissions. The project is progressing and the consultations with the European Works Council and local unions are expected to be finalised during the third quarter. Cloetta will share further information on the investment during a special investor event on September 27.

Geopolitical developments

The war in Ukraine that erupted at the end of February entails risks of further impact on the global economy, further cost inflation, and disruptions in supply chains. While Cloetta does not have any significant direct financial exposure to any of the countries involved, the company is being impacted by rising input costs and global supply chain challenges.

Net sales

Net sales for the second quarter increased by SEK 206m to SEK 1,626m (1,420) compared to the same period of last year. Organic growth was 11.9 per cent and the impact of changes in exchange rates was 2.6 per cent.

Changes in net sales, %	Apr–Jun 2022	Jan–Jun 2022
Organic growth	11.9	9.5
Changes in exchange rates	2.6	2.8
Total	14.5	12.3

Gross profit

Gross profit, adjusted for items affecting comparability, was positively impacted by higher volumes, favourable mix and pricing, partly offset by higher input costs, and amounted to SEK 579m. Gross profit amounted to SEK 359m (527), which equates to a gross margin of 22.1 per cent (37.1).

Operating profit/loss

Operating profit, adjusted for items affecting comparability, amounted to SEK 162m (127), and was positively impacted by higher gross profit. Operating loss amounted to SEK -61m (126).

Items affecting comparability

Operating profit for the second quarter includes items affecting comparability of SEK -223m (–1) that are mainly related to the greenfield facility, consisting of recognised impairments of SEK -126m and provisions and other items affecting comparability of SEK -99m.

Net financial items

Net financial items for the quarter amounted to SEK -67m (-17). Interest expenses related to external borrowings were SEK -8m (-8), exchange differences on cash and cash equivalents were SEK -70m (-6) which mainly related to the development of the Swedish and Norwegian krona and the Great Britain pound against the euro during the quarter. Other financial items amounted to SEK 11m (-3) of which SEK 12m (2) related to the unrealised gains on single currency interest rate swaps. Of the total net financial items SEK -24m (25) is non-cash in nature.

Profit/loss for the period

Loss for the period was SEK -94m (86), driven by items affecting comparability and unrealised exchange rate differences on cash and cash equivalents, which equates to basic and diluted earnings per share of SEK -0.33 (0.30). Income tax for the period was SEK 34m (–23).

The effective tax rate for the quarter was 26.6 per cent (21.1) and was positively impacted due to the relatively high weighted applicable tax rate of the countries where the costs related to the greenfield facility are recognised and by the impact of the international tax rate differences. Non-deductible expenses had a negative impact on the effective tax rate for the period.

Free cash flow

The free cash flow was SEK -136m (102). Cash flow from operating activities before changes in working capital was SEK 190m (149). The improvement compared to last year is mainly due to the higher operating profit, adjusted. The cash flow from changes in working capital was SEK -268m (6).

The cash flow from investments in property, plant and equipment and intangible assets was SEK -58m (-53).

Cash flow from changes in working capital

Cash flow from changes in working capital was SEK -268m (6). The cash flow from changes in working capital was negatively impacted by an increase in inventories for an amount of SEK -123m (5), an increase in receivables amounting to SEK -97m (-5) and a decrease in payables of SEK -48m (6).

Cash flow from other investing activities Cash flow from other investing activities was SEK 1m (1).

Cash flow from financing activities

Cash flow from financing activities was SEK -309m (-242). The cash flow from financing activities was related to the dividend distribution of SEK -287m (-215), payments of lease liabilities of SEK -19m (–18) and net proceeds and repayments of loans from credit institutions and commercial papers including transaction costs of SEK -3m (–8). Other cash flows from financing activities amounted to SEK 0m (–1).

Development during the year

Net sales

Net sales for the first half of the year increased by SEK 348m to SEK 3,166m (2,818) compared to the same period of last year. Organic growth was 9.5 per cent and the impact of changes in exchange rates was 2.8 per cent.

Gross profit

Gross profit, adjusted for items affecting comparability, was positively impacted by higher volumes, favourable mix and pricing, partly offset by higher input costs, and amounted to SEK 1,140m. Gross profit amounted to SEK 920m (992), which equates to a gross margin of 29.1 per cent (35.2).

Operating profit

Operating profit, adjusted for items affecting comparability, amounted to SEK 320m (234), and was positively impacted by higher gross

profit, partly offset by higher marketing investments. Operating profit amounted to SEK 93m (229).

Items affecting comparability

Operating profit for the first half of the year includes items affecting comparability of SEK -227m (–5) that are mainly related to the greenfield facility, consisting of recognised impairments of SEK -126m and provisions and other items affecting comparability of SEK -99m.

Net financial items

Net financial items for the first half of the year amounted to SEK -54m (3). Interest expenses related to external borrowings were SEK -16m (-16), exchange differences on cash and cash equivalents were SEK -64m (25) which mainly related to the development of the Swedish and Norwegian krona and the Great Britain pound against the euro during the first half of the year. Other financial items amounted to SEK 26m (-6) of which SEK 24m (3) related to the unrealised gains on single currency interest rate swaps. Of the total net financial items SEK -38m (4) is non-cash in nature.

Profit for the period

Profit for the period was SEK 37m (189), driven by items affecting comparability and unrealised exchange rate differences on cash and cash equivalents, which equates to basic and diluted earnings per share of SEK 0.13 (0.66). Income tax for the period was SEK -2m (-43).

The effective tax rate for the period was 5.1 per cent (18.5) and was positively impacted due to the relatively high weighted applicable tax rate of the countries where the costs related to the greenfield facility are recognised and by the impact of the international tax rate differences. Non-deductible expenses had a negative impact on the effective tax rate for the period. The effective tax rate for the period excluding the costs related to the greenfield facility would have been 22.0 per cent.

Free cash flow

The free cash flow was SEK -159m (113). Cash flow from operating activities before changes in working capital was SEK 365m (271). The improvement compared to last year is mainly due to the higher operating profit, adjusted. The cash flow from changes in working capital was SEK -416m (-62).

The cash flow from investments in property, plant and equipment and intangible assets was SEK -108m (-96).

the president Financial overview Quarterly highlights Financial statements Disclosures Definitions

Cash flow from changes in working capital

Cash flow from changes in working capital was SEK -416m (-62). The cash flow from changes in working capital was negatively impacted by an increase in inventories for an amount of SEK -264m (33), an increase in receivables amounting to SEK -223m (-122) partly offset by an increase in payables of SEK 71m (27).

Cash flow from other investing activities Cash flow from other investing activities was SEK 1m (3).

Cash flow from financing activities

Cash flow from financing activities was SEK -326m (-259). The cash flow from financing activities was related to the dividend distribution of SEK -287m (-215), payments of lease liabilities of SEK -36m (–36) and net proceeds and repayments of loans from credit institutions and commercial papers including transaction costs of SEK -3m (–7). Other cash flows from financing activities amounted to SEK 0m (–1).

Financial position

Consolidated equity at 30 June 2022 amounted to SEK 4,594m (4,258), which equates to SEK 16.0 (14.8) per share outstanding. Net debt at 30 June 2022 was SEK 2,194m (2,193).

Long-term borrowings totalled SEK 2,208m (2,151) and consisted of SEK 2,141m (2,064) in gross non-current loans from credit institutions, SEK 71m (92) in non-current lease liabilities and SEK -4m (-5) in capitalised transaction costs.

Total short-term borrowings amounted to SEK 211m (304) and consisted of SEK 149m (250) in commercial papers, SEK 64m (57) in current lease liabilities and SEK -2m (–3) in capitalised transaction costs.

During the second quarter Cloetta has lifted the extension options on all existing loan facilities with one year. The extensions were agreed upon with the existing banking group at the same terms as agreed upon in the facilities agreement with effective date of 30 June 2021. The terms after lifting the extension options comprise, in short:

• a SEK 800m term loan repayable on 30 June 2024, with the possibility of extending the facility for an additional year;

• a EUR 125m term loan repayable on 30 June 2025, with the possibility of extending the facility for an additional year; and
• a EUR 60m revolving credit facility available up to 30 June 2026, with the possibility of extending the facility for an additional year.

SEKm 30 Jun 2022 30 Jun 2021 31 Dec 2021 Gross non-current loans from credit institutions 2,141 2,064 2,081 Commercial papers 149 250 150 Lease liabilities 135 149 143 Derivative financial instruments -26 2 -3 Gross debt 2,399 2,465 2,371 Cash and cash equivalents -205 -272 -692 Net debt 2,194 2,193 1,679

Cash and cash equivalents at 30 June 2022 amounted to SEK 205m (272). At 30 June 2022 Cloetta had an unutilised credit facility of SEK 644m (607) and the possibility to issue additional commercial papers for an amount of SEK 850m (750).

Performance by business segment

Cloetta has identified the "Branded packaged products" business and the "Pick & mix" business as its operating segments.

The chief operating decision-maker (CODM), which is the CEO and President of the Group, primarily uses external net sales and operating profit, adjusted for items affecting comparability, to assess the performance of its operating segments. Items affecting comparability, net financial items and income tax are not allocated to segments, as these are managed centrally.

No segment information is provided to or assessed by the CODM on assets and liabilities and therefore these are not separately disclosed.

Information related to each reportable segment (business segment) is set out below. For more information regarding the determination of reportable segments reference is made to page 25.

Business segments

The Cloetta Group comprises two segments: "Branded packaged products" and "Pick & mix". The Pick & mix net sales and adjusted operating profit relate to Cloetta's complete offering in pick & mix including products, displays and accompanying store and logistic services. All other activities within the Cloetta Group are reflected in the "Branded packaged products" segment.

Words from

the president Financial overview Quarterly highlights Financial statements Disclosures Definitions

Apr–Jun 2022 SEKm	Branded packaged products	Pick & mix	Total	Jan–Jun 2022 SEKm	Branded packaged products	Pick & mix	Total
Net sales	1,213	413	1,626	Net sales	2,373	793	3,166
Operating profit, adjusted	154	8	162	Operating profit, adjusted	303	17	320
Items affecting comparability			-223	Items affecting comparability			-227
Operating profit/loss			-61	Operating profit			93
Net financial items			-67	Net financial items			-54
Profit/loss before tax			-128	Profit before tax			39
Income tax			34	Income tax			-2
Profit/loss for the period			-94	Profit for the period			37

	Jan–Jun 2022 SEKm	Branded packaged products	Pick & mix	Total
-223	Items affecting comparability			-227

Apr–Jun 2021 SEKm	Branded packaged products	Pick & mix	Total	Jan–Jun 2021 SEKm	Branded packaged products	Pick & mix	Total
Net sales	1,097	323	1,420	Net sales	2,198	620	2,818
Operating profit, adjusted	123	4	127	Operating profit, adjusted	254	-20	234
Items affecting comparability			-1	Items affecting comparability			-5
Operating profit			126	Operating profit			229
Net financial items			-17	Net financial items			3
Profit before tax			109	Profit before tax			232
Income tax			-23	Income tax			-43
Profit for the period			86	Profit for the period			189

Segment Branded packaged products

Second quarter development

Net Sales

Net sales for the second quarter increased by SEK 116m to SEK 1,213m (1,097) compared to last year for Branded packaged products. Organic growth was 8.2 per cent.

Operating profit, adjusted

Operating profit, adjusted for items affecting comparability, amounted to SEK 154m (123). The increase in adjusted operating profit was driven by favourable mix and pricing, partly offset by higher input costs.

Development during the year

Net Sales

Net sales for the first half of the year increased by SEK 175m to SEK 2,373m (2,198) compared to last year for Branded packaged products. Organic growth was 5.4 per cent.

Operating profit, adjusted

Operating profit, adjusted for items affecting comparability, amounted to SEK 303m (254). The increase in adjusted operating profit was driven by favourable mix and pricing, partly offset by higher input costs and higher marketing investments.

Segment Pick & mix

Second quarter development Net Sales

Net sales for the second quarter increased by SEK 90m to SEK 413m (323) compared to the same period of last year. Organic growth was 24.4 per cent.

Operating profit, adjusted

Operating profit, adjusted for items affecting comparability, amounted to SEK 8m (4). The increase in adjusted operating profit was driven by

higher volumes, pricing and continued margin-enhancing initiatives, partly offset by higher input costs.

Development during the year

Net Sales

Net sales for the first half of the year increased by SEK 173m to SEK 793m (620) compared to the same period of last year. Organic growth was 24.1 per cent.

Operating profit, adjusted

Operating profit, adjusted for items affecting comparability, amounted to SEK 17m (-20). The increase in adjusted operating profit was driven by higher volumes, pricing and continued margin-enhancing initiatives, partly offset by higher input costs.

Other disclosures

Seasonal variations

Cloetta's sales and operating profit are subject to some seasonal variations. Sales in the first and second quarters are affected by the Easter holiday, depending on in which quarter it occurs. In the fourth quarter, sales are usually higher than in the first three quarters of the year, which is mainly attributable to the sale of products in Sweden in connection with the holiday season.

Employees

The average number of employees during the quarter was 2,618 (2,609).

Events after the balance sheet date

After the end of the reporting period, no significant events have taken place that could affect the company's operations.

Examples of new launches during the second quarter

Finland

Overview

AAKKOSET – Aito & Hedelmäinen duo, fruit & licorice JENKKI PROFESSIONAL – Tasty salmiak TUPLA DOUBLE LAYER – Chocolate bar, maple syrup TV MIX – Hedelmä, mixed bag with fruit flavor SISU – Tuima, mixed bag with tast of licorice, salmiak and fruit

The Netherlands

VENCO – Drogisterijmix, licorice mix

Sweden

CLOETTA JULISKUM – Raspberry & pineapple GOTT & BLANDAT – Real fruit candy, fruit & licorice LÄKEROL DENTS – Sweet mango LÄKEROL YUP – Crispy raspberry passion

POLLY – Ice cream, with taste of raspberry, pear, caramel and milkchocolate

Norway

LÄKEROL YUP – Love All Flavours, mixed flavors

2,600

Employees

Cloetta

– a leading confectionery company in Northern Europe.

1862

Founded in

7 Factories

2 Business segments

Cloetta's net sales, April-June 2022

Strategic priorities

Lower costs and greater efficiency

Sustainability 3 1

2

Growth leadership in Branded packaged products

Sustainable value within the Pick & mix business

Q2 highlights

1 Growth leadership in Branded packaged products

Activities

• Continued roll-out of premium product innovations
• Further actions initiated to grow sales within pastille and gum categories
• Price increases implemented; new pricing announced given further inflation

2 Sustainable value within the Pick & mix business

Activities

• Continued to prolong existing and signed new profitable Pick & mix contracts
• Price increases implemented; new pricing announced given further inflation

Activities

• Net Revenue Management programme roll out progressing; first phase completed in core markets
• Portfolio optimisation through complexity reduction
• All loan facilities extended by one year with our banking group to 2024-2026

Sustainability

We provide choices for you

We create joyful moments through our products. We aim to meet the variety of consumer preferences.

We care about people

We support our employees, our suppliers and farmers, as well as our communities.

For You For People For the Planet

We improve our planet footprint

Our business depends on the environment. We take responsibility for our impacts; from sourcing to packaging.

Q2 highlights

More natural

• Optimising our portfolio by assessing alternative ingredients that meet our requirements of naturalness and recognisability.

Community involvement

• Structuring our responsible marketing initiative with guidance for transparent on-pack communication and portion control.

Climate Action Programme

• Our climate action journey towards our 2030 emissions reduction target continues with approved science-based targets.

The Board of Directors hereby gives its assurance that the interim report provides a true and fair view of the business activities, financial position and results of operations of the Group and the Parent Company, and describes the significant risks and uncertainties to which the Parent Company and the Group companies are exposed.

Stockholm, 15 July 2022

Cloetta AB (publ)

Mikael Norman Board Chairman

Mikael Aru Patrick Bergander Malin Jennerholm Member of the Board Member of the Board Member of the Board

Member of the Board Member of the Board Member of the Board

Lottie Knutson Alan McLean Raleigh Camilla Svenfelt

Mikael Svenfelt Lena Grönedal Mikael Ström Member of the Board Employee Board member Employee Board member

Henri de Sauvage-Nolting President and CEO

The information in this interim report has not been reviewed by the company's auditors.

Financial calendar

Interim report Q3 27 October 2022 Interim report Q4 27 January 2023

Contact

Nathalie Redmo, Head of IR and Communication + 46 76 696 59 40

This information is information that Cloetta AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person detailed above, at 08:00 a.m. CEST on 15 July 2022.

Financial statements in summary

Consolidated profit and loss account

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Net sales	1,626	1,420	3,166	2,818	6,394	6,046
Cost of goods sold	-1,267	-893	-2,246	-1,826	-4,318	-3,898
Gross profit	359	527	920	992	2,076	2,148
Selling expenses	-246	-242	-492	-453	-977	-938
General and administrative expenses	-174	-159	-335	-310	-670	-645
Operating profit/loss	-61	126	93	229	429	565
Exchange differences on cash and cash equivalents in foreign currencies	-70	-6	-64	25	-56	33
Other financial income	13	2	30	3	36	9
Other financial expenses	-10	-13	-20	-25	-44	-49
Net financial items	-67	-17	-54	3	-64	-7
Profit/loss before tax	-128	109	39	232	365	558
Income tax	34	-23	-2	-43	-45	-86
Profit/loss for the period	-94	86	37	189	320	472
Profit/loss for the period attributable to:
Owners of the Parent Company	-94	86	37	189	320	472
Earnings per share, SEK
Basic and diluted1	-0.33	0.30	0.13	0.66	1.11	1.64
Number of shares outstanding at end of period1	287,028,670	288,619,299	287,028,670	288,619,299	287,028,670	287,028,670
Average number of shares (basic)1	287,028,670	286,960,980	287,028,670	286,798,234	287,595,195	287,480,924
Average number of shares (diluted)1	287,118,782	287,136,929	287,117,335	287,006,996	287,693,668	287,518,726

1 During 1 till 9 November 2021 Cloetta purchased 1.590.629 treasury shares to fulfill its future obligation to deliver shares to the participants of the long-term share-based incentive plan.

Consolidated statement of comprehensive income

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Profit/loss for the period	-94	86	37	189	320	472
Other comprehensive income
Remeasurement of defined benefit pension plans	71	11	143	71	81	9
Income tax on remeasurement of de fined benefit pension plans	-15	-3	-30	-15	-17	-2
Items that will never be reclassified to profit or loss for the period	56	8	113	56	64	7
Currency translation differences	214	-69	266	42	344	120
Hedge of a net investment in a foreign operation	-57	18	-70	-6	-88	-24
Income tax on hedge of a net invest ment in a foreign operation	10	-4	13	1	17	5
Items that are or may be reclassified to profit or loss for the period	167	-55	209	37	273	101
Total other comprehensive income	223	-47	322	93	337	108
Total comprehensive income, net of tax	129	39	359	282	657	580
Total comprehensive income for the period attributable to:
Owners of the Parent Company	129	39	359	282	657	580

Net financial items

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Exchange differences on cash and cash equivalents in foreign currencies	-70	-6	-64	25	-56	33
Other financial income, third parties	1	0	6	0	8	2
Unrealised gains on single currency interest rate swaps	12	2	24	3	28	7
Total Other financial income	13	2	30	3	36	9
Interest expenses third-party borrow ings and realised losses on single currency interest rate swaps	-8	-8	-16	-16	-33	-33
Amortisation of capitalised transaction costs	0	-1	-1	-2	-2	-3
Other financial expenses, third parties	-2	-4	-3	-7	-9	-13
Total Other financial expenses	-10	-13	-20	-25	-44	-49
Net financial items	-67	-17	-54	3	-64	-7

Condensed consolidated balance sheet

SEKm	30 Jun 2022	30 Jun 2021	31 Dec 2021
ASSETS
Non-current assets
Intangible assets	5,749	5,543	5,582
Property, plant and equipment	1,512	1,555	1,576
Deferred tax asset	60	26	42
Derivative financial instruments	5	0	2
Other financial assets	8	5	5
Total non-current assets	7,334	7,129	7,207
Current assets
Inventories	1,135	925	843
Other current assets	1,079	898	806
Derivative financial instruments	21	0	1
Cash and cash equivalents	205	272	692
Total current assets	2,440	2,095	2,342
TOTAL ASSETS	9,774	9,224	9,549
EQUITY AND LIABILITIES
Equity	4,594	4,258	4,515
Non-current liabilities
Long-term borrowings	2,208	2,151	2,162
Deferred tax liability	918	871	863
Provisions for pensions and other long-term employee benefits	356	442	505
Provisions	105	1	-
Total non-current liabilities	3,587	3,465	3,530
Current liabilities
Short-term borrowings	211	304	206
Derivative financial instruments	-	3	0
Other current liabilities	1,377	1,183	1,293
Provisions	5	11	5
Total current liabilities	1,593	1,501	1,504
TOTAL EQUITY AND LIABILITIES	9,774	9,224	9,549

Condensed consolidated statement of changes in equity

	6 months		Full Year
SEKm	Jan–Jun 2022	Jan–Jun 2021	Jan–Dec 2021
Equity at beginning of period	4,515	4,153	4,153
Profit for the period	37	189	472
Other comprehensive income	322	93	108
Total comprehensive income	359	282	580
Transactions with owners
Forward contract to repurchase own shares	-	48	48
Purchase of treasury shares	-	-	-44
Share-based payments	7	-10	-7
Dividend1	-287	-216	-216
Dividend on outstanding shares in forward contracts to repurchase own shares	-	1	1
Total transactions with owners	-280	-177	-218
Equity at end of period	4,594	4,258	4,515

1 The dividend paid in 2022 comprised a dividend of SEK 1.00 (0.75) per share.

Condensed consolidated cash flow statement

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Cash flow from operating activities before changes in working capital	190	149	365	271	769	675
Cash flow from changes in working capital	-268	6	-416	-62	-171	183
Cash flow from operating activities	-78	155	-51	209	598	858
Cash flows from investments in property, plant and equipment and intangible assets	-58	-53	-108	-96	-206	-194
Cash flow from other investing activities	1	1	1	3	1	3
Cash flow from investing activities	-57	-52	-107	-93	-205	-191
Cash flow from operating and investing activities	-135	103	-158	116	393	667
Cash flow from financing activities	-309	-242	-326	-259	-503	-436
Cash flow for the period	-444	-139	-484	-143	-110	231
Cash and cash equivalents at beginning of period	683	444	692	396	272	396
Cash flow for the period	-444	-139	-484	-143	-110	231
Exchange difference	-34	-33	-3	19	43	65
Total cash and cash equivalents at end of period	205	272	205	272	205	692

Condensed consolidated key figures

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Profit
Net sales	1,626	1,420	3,166	2,818	6,394	6,046
Net sales, change, %	14.5	14.8	12.3	2.3	11.0	6.2
Organic net sales, change, %	11.9	18.2	9.5	5.9	10.1	8.4
Gross margin, %	22.1	37.1	29.1	35.2	32.5	35.5
Depreciation	-66	-63	-126	-126	-250	-250
Amortisation	-2	-2	-5	-5	-10	-10
Impairment loss other non-current assets	-126	-1	-126	-1	-126	-1
Operating profit, adjusted	162	127	320	234	657	571
Operating profit margin, adjusted %	10.0	8.9	10.1	8.3	10.3	9.4
Operating profit/loss (EBIT)	-61	126	93	229	429	565
Operating profit margin (EBIT margin), %	-3.8	8.9	2.9	8.1	6.7	9.3
EBITDA, adjusted	230	193	451	366	917	832
EBITDA	133	192	350	361	815	826
Profit margin, %	-7.9	7.7	1.2	8.2	5.7	9.2
Segments
Branded packaged products
Net sales	1,213	1,097	2,373	2,198	4,861	4,686
Operating profit, adjusted	154	123	303	254	626	577
Operating profit margin, adjusted %	12.7	11.2	12.8	11.6	12.9	12.3
Pick & mix
Net sales	413	323	793	620	1,533	1,360
Operating profit/loss, adjusted	8	4	17	-20	31	-6
Operating profit margin, adjusted %	1.9	1.2	2.1	-3.2	2.0	-0.4
Financial position
Working capital	799	605	799	605	799	363
Capital expenditure	63	58	134	106	258	230
Net debt	2,194	2,193	2,194	2,193	2,194	1,679
Capital employed	7,369	7,157	7,369	7,157	7,369	7,388
Return on capital employed, % (Rolling 12 months)	6.4	5.9	6.4	5.9	6.4	7.9
Equity/assets ratio, %	47.0	46.2	47.0	46.2	47.0	47.3
Net debt/equity ratio, %	47.8	51.5	47.8	51.5	47.8	37.2
Return on equity, % (Rolling 12 months)	7.0	7.2	7.0	7.2	7.0	10.5
Equity per share, SEK	16.0	14.8	16.0	14.8	16.0	15.7
Net debt/EBITDA, x (Rolling 12 months)	2.4	2.9	2.4	2.9	2.4	2.0
Cash flow
Cash flow from operating activities	-78	155	-51	209	598	858
Cash flow from investing activities	-57	-52	-107	-93	-205	-191
Cash flow after investments	-135	103	-158	116	393	667
Free cash flow	-136	102	-159	113	392	664
Free cash flow yield (Rolling 12 months), %	6.5	8.4	6.5	8.4	6.5	8.8
Cash flow from operating activities per share, SEK	-0.3	0.5	-0.2	0.7	2.1	3.0
Employees
Average number of employees	2,618	2,609	2,631	2,605	2,603	2,599

Reconciliation of alternative performance measures key figures

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Items affecting comparability
Acquisitions, integration and restructurings	-225	-1	-229	-5	-230	-6
of which: impairment loss other non-current assets	-126	-	-126	-	-126	-
Other items affecting comparability	2	-	2	-	2	-
Items affecting comparability	-223	-1	-227	-5	-228	-6
Corresponding line in the condensed consolidated profit and loss account:
Cost of goods sold	-220	0	-220	0	-219	1
Selling expenses	-	-	-4	-	-4	-
General and administrative expenses	-3	-1	-3	-5	-5	-7
Total	-223	-1	-227	-5	-228	-6
Operating profit, adjusted
Operating profit/loss	-61	126	93	229	429	565
Minus: Items affecting comparability	-223	-1	-227	-5	-228	-6
Operating profit, adjusted	162	127	320	234	657	571
Net sales	1,626	1,420	3,166	2,818	6,394	6,046
Operating profit margin, adjusted, %	10.0	8.9	10.1	8.3	10.3	9.4
EBITDA, adjusted
Operating profit/loss	-61	126	93	229	429	565
Minus: Depreciation	-66	-63	-126	-126	-250	-250
Minus: Amortisation	-2	-2	-5	-5	-10	-10
Minus: Impairment loss other non-cur rent assets	-126	-1	-126	-1	-126	-1
EBITDA	133	192	350	361	815	826
Minus: Items affecting comparability (excl. impairment loss other non-current assets)	-97	-1	-101	-5	-102	-6
EBITDA, adjusted	230	193	451	366	917	832
Capital employed
Total assets	9,774	9,224	9,774	9,224	9,774	9,549
Minus: Deferred tax liability	918	871	918	871	918	863
Minus: Non-current provisions	105	1	105	1	105	-
Minus: Current provisions	5	11	5	11	5	5
Minus: Other current liabilities	1,377	1,184	1,377	1,184	1,377	1,293
Capital employed	7,369	7,157	7,369	7,157	7,369	7,388

Reconciliation alternative performance measures, continued

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Capital employed comparative period previous year	7,157	7,439	7,157	7,439	7,157	7,198
Average capital employed	7,263	7,298	7,263	7,298	7,263	7,293
Return on capital employed
Operating profit (Rolling 12 months)	429	425	429	425	429	565
Financial income (Rolling 12 months)	36	4	36	4	36	9
Operating profit plus financial income (Rolling 12 months)	465	429	465	429	465	574
Average capital employed	7,263	7,298	7,263	7,298	7,263	7,293
Return on capital employed, %	6.4	5.9	6.4	5.9	6.4	7.9
Free cash flow yield
Cash flow from operating activities (Rolling 12 months)	598	828	598	828	598	858
Cash flows from investments in property, plant and equipment and intangible assets (Rolling 12 months)	-206	-211	-206	-211	-206	-194
Free cash flow (Rolling 12 months)	392	617	392	617	392	664
Number of shares outstanding	287,028,670	288,619,299	287,028,670	288,619,299	287,028,670	287,028,670
Free cash flow per share (Rolling 12 months), SEK	1.37	2.14	1.37	2.14	1.37	2.31
Market price per share, SEK	20.96	25.54	20.96	25.54	20.96	26.20
Free cash flow yield (Rolling 12 months), %	6.5	8.4	6.5	8.4	6.5	8.8
Changes in net sales
Net sales	1,626	1,420	3,166	2,818	6,394	6,046
Net sales comparative period previous year	1,420	1,237	2,818	2,755	5,758	5,695
Net sales, change	206	183	348	63	636	351
Minus: Changes in exchange rates	37	-43	80	-99	54	-125
Organic growth	169	226	268	162	582	476
Organic growth, %	11.9	18.2	9.5	5.9	10.1	8.4

Quarterly data

SEKm	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020
Profit and loss account
Net sales	1,626	1,540	1,662	1,566	1,420	1,398	1,466	1,474	1,237
Cost of goods sold	-1,267	-979	-1,057	-1,015	-893	-933	-923	-1,040	-777
Gross profit	359	561	605	551	527	465	543	434	460
Selling expenses	-246	-246	-276	-209	-242	-211	-253	-248	-213
General and administrative expenses	-174	-161	-172	-163	-159	-151	-176	-104	-146
Operating profit/loss	-61	154	157	179	126	103	114	82	101
Exchange differences on cash and cash equivalents in foreign currencies	-70	6	9	-1	-6	31	34	-11	45
Other financial income	13	17	4	2	2	1	1	0	1
Other financial expenses	-10	-10	-12	-12	-13	-12	-13	-13	-14
Net financial items	-67	13	2	-11	-17	20	22	-24	32
Profit/loss before tax	-128	167	158	168	109	123	136	58	133
Income tax	34	-36	-11	-32	-23	-20	-59	-16	-27
Profit/loss for the period	-94	131	147	136	86	103	77	42	106
Profit/loss for the period attributable to:
Owners of the Parent Company	-94	131	147	136	86	103	77	42	106
Key figures Profit
Depreciation, amortisation and impairment	-194	-63	-63	-66	-66	-66	-74	-78	-69
Operating profit, adjusted	162	158	157	180	127	107	116	125	106
EBITDA, adjusted	230	221	220	246	193	173	191	191	175
EBITDA	133	217	220	245	192	169	188	160	170
Operating profit margin, adjusted %	10.0	10.3	9.4	11.5	8.9	7.7	7.9	8.5	8.6
Operating profit margin (EBIT margin), %	-3.8	10.0	9.4	11.4	8.9	7.4	7.8	5.6	8.2
Earnings per share, SEK
Basic and diluted1	-0.33	0.46	0.51	0.47	0.30	0.36	0.27	0.15	0.37
Segments
Branded packaged products
Net sales	1,213	1,160	1,284	1,204	1,097	1,101	1,179	1,178	1,052
Operating profit, adjusted	154	149	152	171	123	131	164	149	165
Operating profit margin, adjusted %	12.7	12.8	11.8	14.2	11.2	11.9	13.9	12.6	15.7
Pick & mix
Net sales	413	380	378	362	323	297	287	296	185
Operating profit/loss, adjusted	8	9	5	9	4	-24	-48	-24	-59
Operating profit margin, adjusted %	1.9	2.4	1.3	2.5	1.2	-8.1	-16.7	-8.1	-31.9
Financial position
Share price, last paid, SEK	20.96	25.74	26.20	27.12	25.54	25.56	24.52	26.00	23.72
Return on equity, % (Rolling 12 months)	7.0	10.5	10.5	9.1	7.2	7.5	6.4	8.2	10.4
Equity per share, SEK	16.0	16.5	15.7	15.2	14.8	15.2	14.4	15.2	14.9
Net Debt/EBITDA, x (Rolling 12 months)	2.4	1.9	2.0	2.5	2.9	2.9	2.8	2.6	2.6
Cash flow
Free cash flow	-136	-23	313	238	102	11	252	252	-118
Cash flow from operating activities per share, SEK	-0.3	0.1	1.3	1.0	0.5	0.2	1.1	1.1	-0.1

1 Cloetta entered into forward contracts to repurchase own shares to fulfill its future obligation to deliver the shares to the participants of the long-term sharebased incentive plan. The contract has been settled in the second quarter of 2021.

Reconciliation of alternative performance measures per quarter

SEKm	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020
Items affecting comparability
Acquisitions, integration and restructurings	-225	-4	0	-1	-1	-4	-2	-43	-5
of which: impairment loss non-current assets	-126	-	-	-	-	-	1	-12	-
Other items affecting comparability	2	-	-	-	-	-	-	-	-
Items affecting comparability	-223	-4	0	-1	-1	-4	-2	-43	-5
Corresponding line in the condensed consolidated profit and loss account:
Cost of goods sold	-220	-	1	-	0	-	0	-19	0
Selling expenses	-	-4	-	-	-	-	0	-12	0
General and administrative expenses	-3	-	-1	-1	-1	-4	-2	-12	-5
Total	-223	-4	0	-1	-1	-4	-2	-43	-5
Operating profit. adjusted
Operating profit/loss	-61	154	157	179	126	103	114	82	101
Minus: Items affecting comparability	-223	-4	0	-1	-1	-4	-2	-43	-5
Operating profit, adjusted	162	158	157	180	127	107	116	125	106
Net sales	1,626	1,540	1,662	1,566	1,420	1,398	1,466	1,474	1,237
Operating profit margin, adjusted, %	10.0	10.3	9.4	11.5	8.9	7.7	7.9	8.5	8.6
EBITDA, adjusted
Operating profit/loss Minus: Depreciation	-61 -66	154 -60	157 -61	179 -63	126 -63	103 -63	114 -72	82 -65	101 -66
Minus: Amortisation	-2	-3	-2	-3	-2	-3	-2	-3	-2
Minus: Impairment loss other non-current	-126	-	-	-	-1	-	0	-10	-1
assets
EBITDA	133	217	220	245	192	169	188	160	170
Minus: Items affecting comparability (excl. impairment loss other non-current assets)	-97	-4	0	-1	-1	-4	-3	-31	-5
EBITDA, adjusted	230	221	220	246	193	173	191	191	175
Capital employed
Total assets	9,774	9,878	9,549	9,544	9,224	9,464	9,228	9,595	9,364
Minus: Deferred tax liability	918	894	863	881	871	867	836	813	797
Minus: Non-current provisions	105	1	-	-	1	-	5	6	-
Minus: Current provisions	5	6	5	7	11	28	24	28	6
Minus: Other current liabilities	1,377	1,422	1,293	1,328	1,184	1,187	1,165	1,233	1,122
Capital employed	7,369	7,555	7,388	7,328	7,157	7,382	7,198	7,515	7,439
Capital employed comparative period previous year	7,157	7,382	7,198	7,515	7,439	7,989	7,576	7,514	7,362
Average capital employed	7,263	7,469	7,293	7,422	7,298	7,686	7,387	7,515	7,401

Reconciliation alternative performance measures, continued

SEKm	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020
Return on capital employed
Operating profit (Rolling 12 months)	429	616	565	522	425	400	442	537	650
Financial income (Rolling 12 months)	36	25	9	6	4	3	3	2	3
Operating profit plus financial income (Rolling 12 months)	465	641	574	528	429	403	445	539	653
Average capital employed	7,263	7,469	7,293	7,422	7,298	7,686	7,387	7,515	7,401
Return on capital employed, %	6.4	8.6	7.9	7.1	5.9	5.2	6.0	7.2	8.8
Free cash flow yield
Cash flow from operating activities (Rolling 12 months)	598	831	858	800	828	631	641	649	595
Cash flows from investments in property, plant and equipment and intangible assets (Rolling 12 months)	-206	-201	-194	-197	-211	-234	-275	-266	-265
Free cash flow (Rolling 12 months)	392	630	664	603	617	397	366	383	330
Number of shares outstanding	287,028,670	287,028,670	287,028,670	288,619,299	288,619,299	288,619,299	288,619,299	288,619,299	288,619,299
Free cash flow per share (Rolling 12 months), SEK	1.37	2.19	2.31	2.09	2.14	1.38	1.27	1.33	1.14
Market price per share, SEK	20.96	25.74	26.20	27.12	25.54	25.56	24.52	26.00	23.72
Free cash flow yield (Rolling 12 months), %	6.5	8.5	8.8	7.7	8.4	5.4	5.2	5.1	4.8
Changes in net sales
Net sales	1,626	1,540	1,662	1,566	1,420	1,398	1,466	1,474	1,237
Net sales comparative period previous year	1,420	1,398	1,466	1,474	1,237	1,518	1,722	1,629	1,583
Net sales, change	206	142	196	92	183	-120	-256	-155	-346
Minus: Changes in exchange rates	37	43	-7	-19	-43	-56	-44	-36	-11
Organic growth	169	99	203	111	226	-64	-212	-119	-335
Organic growth, %	11.9	7.1	13.8	7.5	18.2	-4.2	-12.3	-7.3	-21.2

Parent company

Condensed parent company profit and loss account

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Net sales	24	23	45	35	96	86
Gross profit	24	23	45	35	96	86
General and administrative expenses	-30	-25	-58	-53	-117	-112
Operating loss	-6	-2	-13	-18	-21	-26
Net financial items	3	-5	5	-8	82	69
Profit/loss before tax	-3	-7	-8	-26	61	43
Income tax	0	1	1	5	-16	-12
Profit/loss for the period	-3	-6	-7	-21	45	31

Profit/loss for the period corresponds to comprehensive income for the period.

Condensed parent company balance sheet

SEKm	30 Jun 2022	30 Jun 2021	31 Dec 2021
ASSETS
Non-current assets	5,360	5,360	5,355
Current assets	114	83	91
TOTAL ASSETS	5,474	5,443	5,446
EQUITY AND LIABILITIES
Equity	2,577	2,853	2,864
Non-current liabilities
Borrowings	939	931	938
Provisions	3	1	2
Total non-current liabilities	942	932	940
Current liabilities
Borrowings	149	250	150
Other current liabilities	1,806	1,408	1,492
Total current liabilities	1,955	1,658	1,642
TOTAL EQUITY AND LIABILITIES	5,474	5,443	5,446

Condensed parent company statement of changes in equity

	6 months		Full Year
SEKm	Jan–Jun 2022	Jan–Jun 2021	Jan–Dec 2021
Equity at beginning of period	2,864	3,100	3,100
Profit/loss for the period	-7	-21	31
Total comprehensive income	-7	-21	31
Transactions with owners
Share-based payments	7	-10	-7
Purchase of treasury shares	-	-	-44
Dividend1	-287	-216	-216
Total transactions with owners	-280	-226	-267
Equity at end of period	2,577	2,853	2,864

1 The dividend paid in 2022 comprised a dividend of SEK 1.00 (0.75) per share.

Accounting and valuation policies, disclosures and risk factors

Accounting and valuation policies

Compliance with legislation and accounting standards The consolidated financial statements are presented in accordance with the International Financial Reporting Standards (IFRS) established by the International Accounting Standards Board (IASB) and the interpretations issued by the IFRS Interpretations Committee (IFRIC) which have been endorsed by the European Commission for application in the EU. The applied standards and interpretations are those that were in force and had been endorsed by the EU at 1 January, 2022. The consolidated interim report is presented compliant with IAS 34, Interim Financial Reporting, and in compliance with the relevant provisions in the Swedish Annual Accounts Act and the Swedish Securities Market Act. The interim report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, which are consistent with the provisions in recommendation RFR 2, Accounting for Legal Entities. For lease accounting the company makes use of the exemption under RFR2 to treat all leases as operating lease.

Basis of accounting

The same accounting policies and methods of computation are applied in the interim financial statements as in the most recent annual financial statements. Reference is made to Note 1 'General information and accounting and valuation policies of the Group' and Note 31 'Changes in accounting policies' in the Annual and sustainability report 2021 at www.cloetta.com. No new standards are effective as from 1 January 2022 which have been endorsed by the EU.

Disclosures

Segment reporting

In the years after the acquisition of the Candyking Group in 2017, the Pick & mix business became a significant part of Cloetta's total business with its own focus, operational organisation, management responsibilities and reporting flows. Following the changes in the business, also the management structure of the Group evolved with the introduction of a Chief Pick & mix Officer (CPMO) responsible for the

development of the Pick & mix business and a Chief Marketing Officer (CMO) being responsible for the marketing of the Branded packaged business. Both officers are members of the executive committee and are accountable within their own business lines and report directly to the President and CEO.

In Q1 2021, Cloetta has reassessed the operating segments with an increased focus on the impact of the changes in the organisation as indicated above. The reassessment has been performed with the intention to come to a sustainable structure taking into account the current organisation, operating model and initiated initiatives related to the direction of the company.

In the assessment it has been considered that both the Branded packaged business and the Pick & mix business have their own specific characteristics. Both business lines generate their own external revenues and incur expenses and for both business lines a different company wide business and investment strategy has been developed and is in place.

The character of the more profitable Branded packaged business requires investments in the brands (A&P) with consumer visibility (traditional- and social media) to generate long term strength of our own brands, leading to value creation for the company. Cloetta manufactures nearly all products sold in this business in its own production facilities.

The much lower margin Pick & mix business is predominantly a wholesale business where Cloetta sells its own products and its competitors' products to retailers under their own private brand or under the CandyKing concept. The Pick & mix business is driven by volumes and requires investments in the pick & mix concept including investments in the fixtures in which the products are offered to the consumer.

Operating segments have been identified in accordance with the guidance provided in IFRS 8 paragraph 5–10.

The overall focus on revenues, profitability, and strategy specifically for the Branded packaged products business versus the Pick & mix business is reflected as such in Cloetta's external financial reporting and this split is aligned with the interest of Cloetta's investors.

Disaggregation of revenue from contracts with customers Cloetta generates revenues from the transfer of goods and services at a point in time and over time in the following major sales categories and performance obligations:

Disaggregation of revenue

	Second quarter	6 months			Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Net sales
Branded packaged products	1,213	1,097	2,373	2,198	4,861	4,686
Pick & mix	413	323	793	620	1,533	1,360
Total	1,626	1,420	3,166	2,818	6,394	6,046

Breakdown of net sales by category

		Second quarter		6 months	Rolling 12	Full Year
%	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Net sales
Candy	61	61	61	60	61	61
Chocolate	19	17	19	18	19	19
Pastilles	10	11	10	11	10	10
Chewing gum	5	6	5	6	5	5
Nuts	3	3	3	3	3	3
Other	2	2	2	2	2	2
Total	100	100	100	100	100	100

Breakdown of net sales by country

	Second quarter		6 months		Rolling 12	Full Year
%	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Sweden	31	31	30	31	31	31
Finland	21	22	21	21	20	21
The Netherlands	15	15	15	14	14	14
Denmark	8	8	8	9	8	9
The UK	7	6	6	5	7	6
Norway	6	6	7	8	7	7
Germany	6	6	6	6	6	6
International Markets	6	6	7	6	7	6
Total	100	100	100	100	100	100

Leases

Right-of-use assets

SEKm	30 Jun 2022	30 Jun 2021	31 Dec 2021
Land and buildings	72	84	81
Transportation	45	52	50
Other equipment	17	12	10
Total right-of-use assets	134	148	141

Additions to the right-of-use assets were SEK 7m (7) during the quarter and SEK 27m (10) during the first half of the year.

Lease liability

SEKm	30 Jun 2022	30 Jun 2021	31 Dec 2021
Current	64	57	59
Non-current (between 1 and 5 years)	70	91	83
Non-current (over 5 years)	1	1	1
Total Lease liability	135	149	143

The non-current lease liability of SEK 71m (92) is reflected in the 'long-term borrowings'. The current lease liability of SEK 64m (57) is reflected in the 'short-term borrowings'.

Depreciation charge right-of-use assets

	Second quarter		6 months		Rolling 12	Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021
Land and buildings	-7	-11	-15	-18	-30	-33
Transportation	-11	-7	-18	-14	-33	-29
Other equipment	-4	-1	-6	-3	-9	-6
Total depreciation charge right-of-use assets	-22	-19	-39	-35	-72	-68

Other disclosures

	Second quarter			6 months		Rolling 12		Full Year
SEKm	Apr–Jun 2022	Apr–Jun 2021	Jan–Jun 2022	Jan–Jun 2021	Jul 2021– Jun 2022	Jan–Dec 2021	Recognised in:
Interest expense	-1	0	-1	-1	-2	-2	net financial items, in the profit and loss account
Expense relating to leases of low-value assets that are not short-term leases	0	0	0	0	-1	-1	cost of goods sold, selling expenses and general and administrative expenses, in the profit and loss account
Expense relating to short term leases, where no right-of-use asset has been recognised	-1	0	-2	-2	-5	-5	cost of goods sold, selling expenses and general and administrative expenses, in the profit and loss account
Expense relating to variable lease payments not included in lease liabilities	-7	-4	-12	-8	-20	-16	cost of goods sold, selling expenses and general and administrative expenses, in the profit and loss account
Total cash outflow for leases	-19	-19	-37	-37	-70	-70	cash flow from operating activi ties and financing activities, in the cash flow statement

Taxes

The effective tax rate for the period was positively impacted by the relatively high weighted applicable tax rate of the countries where the one-off cost related to the Greenfield are recognised and by the impact of the international tax rate differences. Non-deductible expenses had a negative impact on the effective tax rate for the period.

Fair value measurement

The only items recognised at fair value after initial recognition are the interest rate swaps categorised within level 2 of the fair value hierarchy in all periods presented.

The fair values of financial assets (loans and receivables) and liabilities measured at amortised cost are approximately equal to carrying amounts.

For measurement purposes, the fair value of financial assets and liabilities is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The fair value measurements by level according to the fair value measurement hierarchy are as follows:

• •Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• •Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (that is, derived from prices) (level 2).
• •Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the carrying amounts and fair values of the Group's financial assets and liabilities, including their levels in the fair value hierarchy:

30 Jun 2022	Carrying amount		Fair value
SEKm	Mandatorily at FVTPL	Financial assets at amortised cost	Other financial liabilities at carrying value	Total	Level 1	Level 2	Level 3	Total
Financial assets
• Trade and other receivables, excluding other taxes and social security receivables and prepaid expenses and accrued income	-	929	-	929
• Single currency interest rate swaps	26	-	-	26	-	26	-	26
• Cash and cash equivalents	-	205	-	205
Total assets	26	1,134	-	1,160	-	26	-	26
Financial liabilities
• Loans from credit institutions	-	-	2,141	2,141
• Commercial papers	-	-	149	149
• Lease liabilities	-	-	135	135
• Trade and other payables, excluding other taxes and social security payables	-	-	1,215	1,215
Total liabilities	-	-	3,640	3,640	-	-	-	-

31 Dec 2021		Carrying amount			Fair value
SEKm	Mandatorily at FVTPL	Financial assets at amortised cost	Other financial liabilities at carrying value	Total	Level 1	Level 2	Level 3	Total
Financial assets
• Trade and other receivables, excluding other taxes and social security receivables and prepaid expenses and accrued income	-	721	-	721
• Single currency interest rate swaps	3	-	-	3	-	3	-	3
• Cash and cash equivalents	-	692	-	692
Total assets	3	1,413	-	1,416	-	3	-	3
Financial liabilities
• Loans from credit institutions	-	-	2,081	2,081
• Commercial papers	-	-	150	150
• Single currency interest rate swaps	0	-	-	0	-	0	-	0
• Lease liabilities	-	-	143	143
• Trade and other payables, exclud ing other taxes and social security payables	-	-	1,129	1,129
Total liabilities	0	-	3,503	3,503	-	0	-	0

30 Jun 2021	Carrying amount			Fair value
SEKm	Mandatorily at FVTPL	Financial assets at amortised cost	Other financial liabilities at carrying value	Total	Level 1	Level 2	Level 3	Total
Financial assets
• Trade and other receivables, excluding other taxes and social security receivables and prepaid expenses and accrued income	-	778	-	778
• Single currency interest rate swaps	0	-	-	0	-	0	-	0
• Cash and cash equivalents	-	272	-	272
Total assets	0	1,050	-	1,050	-	0	-	0
Financial liabilities
• Loans from credit institutions	-	-	2,064	2,064
• Commercial papers	-	-	250	250
• Single currency interest rate swaps	3	-	-	3	-	3	-	3
• Lease liabilities	-	-	149	149
• Trade and other payables, exclud ing other taxes and social security payables	-	-	1,038	1,038
Total liabilities	3	-	3,501	3,504	-	3	-	3

the president Financial overview Quarterly highlights Financial statements Disclosures Definitions

No transfers between fair value hierarchy levels have occurred during the financial year or the prior financial year. The fair value of financial instruments that are not traded in an active market (for example, overthe-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to determine the fair value of an instrument are observable, the instrument is included within level 2.

The valuation of the instruments is based on quoted market prices, but the underlying swap amounts are based on the specific requirements of the Group. These instruments are therefore included within level 2. The valuation techniques and inputs used to value financial instruments are:

• Quoted market prices or dealer quotes for similar instruments.
• The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.
• The fair value of forward foreign currency contracts is calculated using the difference between the exchange rate on the spot date with the contractually agreed upon exchange rates.
• Other techniques, such as discounted cash flow analysis, are used to determine the fair value of the remaining financial instruments.

Parent Company

Cloetta AB's primary activities include head office functions such as group-wide management and administration. The comments below refer to the period from 1 January to 30 June 2022. Net sales in the Parent Company amounted to SEK 45m (35) and relate mainly to intra-group services. Operating loss was SEK -13m (-18). Net financial items totaled SEK 5m (-8). Loss before tax was SEK -8m (-26) and loss for the period was SEK -7m (-21). Cash and cash equivalents and shortterm investments amounted to SEK 0m (0).

The Cloetta share

Cloetta's class B share is listed on Nasdaq Stockholm, Mid Cap. During the period from 1 January to 30 June 2022, a total of 98,429,788 shares were traded for a combined value of SEK 2,325m, equivalent to around 35 per cent of the total number of class B shares at the end of the period. The highest quoted bid price during the period from 1 January to 30June 2022 was SEK 26.62 (4 January) and the lowest was SEK 20.10 (16 June). The share price on 30 June 2022 was SEK 20.96 (last price paid). During the period from 1 January to 30 June 2022, the Cloetta share decreased by 20.7 per cent while the Nasdaq OMX Stockholm PI index decreased by 29.7 per cent. Cloetta's share capital at 30 June 2022 amounted to 1,443,096,495. The total number of shares is 288,619,299, consisting of 5,735,249 (5,735,249) class A shares and 282,884,050 (282,884,050) class B shares, equal to a quota value of SEK 5 per share. At 30 June 2022 Cloetta had 1,590,629 class B shares in treasury.

Shareholders

On 30 June 2022, Cloetta AB had 39,305 shareholders. The largest shareholder was AB Malfors Promotor with a holding corresponding to 40.7 per cent of the votes and 30.1 per cent of the share capital in the company. LSV Asset Management was the second largest shareholder with 3.0 per cent of the votes and 3.5 per cent of the share capital. The third largest shareholder was Dimensional Fund Advisors with 2.8 per cent of the votes and 3.3 per cent of the share capital.

Risk factors

Cloetta is an internationally active company that is exposed to a number of market and financial risks. All identified risks are monitored continuously and, if needed, risk mitigating measures are taken to limit their impact. The most relevant risk factors are described in the Annual and sustainability report 2021 and consist of industry and market-related risks, operational risks and financial risks.

Compared to the annual and sustainability report which was issued on 14 March 2022, the risk-profile of Cloetta has not significantly changed although the rising input costs and global supply chain challenges, as mentioned in the Q1 interim report, are materialising and may further affect the business performance of Cloetta.

Definitions

General	All amounts in the tables are presented in SEK millions unless otherwise stated. All amounts in brackets () represent comparative figures for the same period of the prior year, unless otherwise stated.
Margins	Definition/calculation	Purpose
Gross margin	Net sales less cost of goods sold as a percentage of net sales.	Gross margin measures production profitability.
Operating profit margin, adjusted	Operating profit, adjusted for items affecting comparability, as a percentage of net sales.	Adjusted operating profit margin excludes the impact of items affecting comparability, enabling a comparison of operational profitability.
Operating profit margin (EBIT margin)	Operating profit expressed as a percentage of net sales.	Operating profit margin is used for measuring the operational profitability.
Profit margin	Profit/loss before tax expressed as a percentage of net sales.	This metric enables the profitability to be compared across locations where corporate taxes differ.
Return	Definition/calculation	Purpose
Free cash flow	Sum of the cash flow from operating activities and cash flow from investments in property, plant and equipment and intangible assets.	The free cash flow is the cash flow available to all investors consisting of shareholders and lenders.
Free cash flow yield	Free cash flow of the last 12 months divided by the number of outstanding shares at the end of the period and conse quently divided by the market price per share at the end of the period.	This metric is an indicator for the return on investment of investors in the company.
Return on capital employed	Operating profit plus financial income as a percentage of average capital employed. The average capital employed is calculated by taking the capital employed per period end and the capital employed by period end of the comparative period in the previous year divided by two.	Return on capital employed is used to analyse profitabil ity, based on the amount of capital used. The leverage of the company is the reason that this metric is used next to return on equity, because it includes equity, but takes into account borrowings and other liabilities as well.
Return on equity	Profit from continuing operations for the period as a per centage of total equity.	Return on equity is used to measure profit generation, given the resources attributable to the owners of the Parent Company.
Capital structure	Definition/calculation	Purpose
Capital employed	Total assets less interest-free liabilities (including deferred tax).	Capital employed measures the amount of capital used and serves as input for the return on capital employed.
Equity/assets ratio	Equity at the end of the period as a percentage of total assets. The equity/assets ratio represents the amount of assets on which shareholders have a residual claim.	This ratio is an indicator of the company's leverage used to finance the firm.
Gross debt	Gross current and non-current borrowings, credit overdraft facilities, lease liabilities, derivative financial instruments and interest payable.	Gross debt represents the total debt obligation of the company irrespective of its maturity.
Net debt	Gross debt less cash and cash equivalents.	The net debt is used as an indication of the ability to pay off all debts if these became due simultaneously on the day of calculation, using only available cash and cash equivalents.
Net debt/EBITDA	Net debt at the end of the period divided by the EBITDA, adjusted, for the last 12 months, taking into consideration the annualisation of EBITDA for acquired or divested companies.	The net debt/EBITDA ratio approximates the company's ability to decrease its debt. It represents the number of years it would take to pay back debt if net debt and EBITDA were held constant, ignoring the impact of cash flows from interest, tax and capital expenditure.
Net debt/equity ratio	Net debt at the end of the period divided by equity at the end of the period.	The net debt/equity ratio measures the extent to which the company is funded by debt. Because cash and overdraft facilities can be used to pay-off debt at short notice, the leverage takes into account net debt instead of gross debt.
Working capital	Total inventories and trade and other receivables adjusted for trade and other payables.	Working capital is used to measure the company's abil ity, besides cash and cash equivalents, to meet current operational obligations.
Data per share	Definition/calculation	Purpose
Cash flow from operating activities per share	Cash flow from operating activities in the period divided by the average number of outstanding shares.	The cash flow from operating activities per share measures the amount of cash the company generates per share from the revenues it brings in, irrespective of the capital investments and cash flows related to the financing structure of the company.
Earnings per share	Profit for the period divided by the average number of out standing shares adjusted for the effect of forward contracts to repurchase own shares.	The earnings per share measures the amount of net profit that is available for payment to shareholders per share.
Equity per share	Equity at the end of the period divided by number of out standing shares at the end of the period.	Equity per share measures the net-asset value backing up each share of the company's equity and determines if a company is increasing shareholder value over time.

Words from

the president Financial overview Quarterly highlights Financial statements Disclosures Definitions

Other definitions	Definition/calculation	Purpose
Amortisation	Amortisation of intangible assets except for amortisation on software which is included in "Depreciation".	Amortisation deviates from depreciation where amorti sation has the purpose to spread capitalised expenses over the useful lifetime of these expenses.
Depreciation	Depreciation of property, plant and equipment and amorti sation of software.	Depreciation deviates from amortisation where depreci ation has the purpose to spread the cost of a non current asset over the useful lifetime of these assets.
EBITDA	Operating profit before depreciation, amortisation and impairments of other non-current assets.	EBITDA is used to measure the cash flow generated from operating activities, eliminating the impact of financing and accounting decisions.
EBITDA, adjusted	Operating profit, adjusted for items affecting comparability, before depreciation, amortisation and impairments of other non-current assets.	Adjusted EBITDA increases the comparability of EBITDA.
Effective tax rate	Income tax as a percentage of profit before tax.	This metric enables the income tax to be compared across locations where corporate taxes differ.
Items affecting comparability	Items affecting comparability are those significant items which are separately disclosed by virtue of their size or incidence, in order to enable a full understanding of the Group's financial performance. These include items such as restructurings, impact from acquisitions or divestments.	Items affecting comparability increases the comparability of the Group's financial performance.
Net financial items	The total of exchange differences on cash and cash equiv alent in foreign currencies, other financial income and other financial expenses.	The net financial items reflects the company's total costs of external financing.
Net sales, change	Net sales as a percentage of net sales in the comparative period of the previous year.	Net sales, change reflects the company's realised top-line growth over time.
Operating profit (EBIT)	Operating profit consists of comprehensive income before net financial items and income tax.	This metric enables the profitability to be compared across locations where corporate taxes differ, irrespec tive the financing structure of the company.
Operating profit (EBIT), adjusted	Operating profit adjusted for items affecting comparability.	Operating profit, adjusted increases the comparability of operating profit.
Organic growth	Net sales, change excluding acquisition-driven growth and changes in exchanges rates.	Organic growth excludes the impact of changes in group structure and exchange rates, enabling a comparison on net sales growth over time.
Structural changes	Net sales, change resulting from changes in group structure.	Structural changes measure the contribution of changes in group structure to the net sales growth.

Glossary

Branded packaged products	Products that are mainly sold under brands and are packaged.
FVTPL	Fair Value Through Profit and Loss.
Pick & mix	Cloetta's range of candy and natural snacks that are picked by the consumers themselves.
Pick & mix concept	Cloetta's complete concept in pick & mix including products, displays and accompanying store and logistic services.

Exchange rates

SEK	30 Jun 2022	30 Jun 2021	31 Dec 2021
EUR, average	10.4795	10.1350	10.1527
EUR, end of period	10.7300	10.1110	10.2503
NOK, average	1.0509	0.9969	0.9991
NOK, end of period	1.0369	0.9940	1.0262
GBP, average	12.4470	11.6979	11.8203
GBP, end of period	12.5029	11.7837	12.1987
DKK, average	1.4085	1.3628	1.3652
DKK, end of period	1.4424	1.3597	1.3784

Overview

the president Financial overview Quarterly highlights Financial statements Disclosures Definitions

Our purpose

"We believe in the Power of True Joy"

Business model

Cloetta's business model is to offer strong local brands in confectionery and nuts and provide effective sales and distribution to the retail trade. Together, this will ensure continued positive development of the company's leading market positions.

Strategic priorities

• 1. Growth leadership in Branded packaged products
• 1. Sustainable value within the Pick & mix business
• 1. Lower costs and greater efficiency

Long-term financial targets

• Cloetta's target is to increase organic sales at least in line with market growth.
• Cloetta's target is an EBIT margin, adjusted for items affecting comparability, of at least 14 per cent.
• Cloetta's long-term target is a net debt/EBITDA ratio of 2.5x.
• Cloetta's long-term intention is a dividend payout of 40–60 per cent of profit after tax.

• Strong brands and market positions in a non-cyclical market.

Sustainability

2

3 1

• Excellent availability in the retail trade with the help of a strong and effective sales and distribution organisation.
• Good consumer knowledge and loyalty.
• Innovative product and packaging development.
• Effective production with high and consistent quality.

Sustainablity

We provide choices for you

We create joyful moments through the quality of our products. We aim to meet the variety of consumer preferences.

We care about people

We support our employees, suppliers, and farmers, as well as our communities.

We improve our footprint

Our business depends on the environment. We are responsible for the impact we have from sourcing to packaging.

"We believe in the Power of True Joy"

Cloetta, founded in 1862, is a leading confectionery company in Northern Europe. In total, Cloetta products are sold in more than 50 countries worldwide. Cloetta owns some of the strongest brands on the market, such as Läkerol, CandyKing, Jenkki, Kexchoklad, Malaco, Sportlife and Red Band. Cloetta has seven production units in five countries. Cloetta's class B shares are traded on Nasdaq Stockholm.

Cloetta AB (publ) • Corp. ID no. 556308-8144 • Landsvägen 50A, Box 2052, 174 02, Sundbyberg, Sweden • Tel +46 (0)8-52 72 88 00 • www.cloetta.com More information about Cloetta is available at www.cloetta.com