Kid ASA — Earnings Release 2021

Feb 16, 2022

Kid ASA 16 February 2022

Q4 2021

Presentation available at investor.kid.no

Financial fourth quarter in brief

• 7 th consecutive quarter with year-on-year increased Earnings Per Share
• Group revenues increased by +2.5% (+6.6%) and LFL by 0.2%¹ (7.4%¹ ).
• Significant increase in revenues from late November as delayed Christmas assortment arrived
• LFL growth of -3.8% (13.6%) in Kid Interior and 7.8% (-1.9%) in Hemtex
• Online growth of 4.7% (59.2%) in Kid Interior and -0.8% (46.4%) in Hemtex
• Gross margin of 63.4% representing an increase of 0.3 percentage points driven by successful pricing, campaigning and a change in product mix, offsetting higher freight costs
• EBITDA excl. IFRS16 effects increased by MNOK 2.1 to MNOK 301.4
• The Board propose a half-year dividend payment of NOK 4.00 per share following strong financial performance and solid liquidity position

Full year financial summary

• Strong financial performance
• Group revenue growth of 3.4%, surpassed NOK 3 bn
• EBITDA (excl. IFRS16) growth of 10.6%
• EBITDA margin (excl. IFRS16) increased from 17.8% to 19.1%
• EPS growth of 8% to NOK 9.46 (NOK 8.76)
• Online growth of 21.7%, online accounted for 10.2% (8.7%² ) of total revenues
• Hemtex EBITDA (excl. IFRS16) of MNOK 172 which surpassed the acquisition target for 2023
• Strong gross margin of 62.6% (62.3%) on back of increased cost of raw materials and freights
• Full-year dividend of NOK 8.60 per share (incl. pre-payment of NOK 4.60 in November 2021), equivalent to a pay-out ratio of 91%

Operational focus in Q4

• New group e-commerce platform launched in Estonia
• Implementation of "Click & Collect" in Hemtex during Q3 generated increased footfall to physical stores
• Successful introduction of a broader assortment of Christmas seasonal products in Hemtex and piloting of the "Funkle" lamp collection
• Five new stores opened, and six stores refurbished and relocated
• Raised MNOK 2.2 to the Pink Ribbon campaign in Norway and SOS Children's Villages in Sweden
• COVID-19 restrictions were most stringent in Finland and Sweden, but we managed to adapt and adjust our operations accordingly

Revenues

5

Kid ASA Q4 2021

Group revenues increased by 2.5%¹ (6.6%¹ )

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

• Group like-for-like increased by 0.2% (7.4%) including online sales
• Kid Interior revenue decline of -1.0% (15.3%)
• Like-for-like decline of -3.8% (13.6%) including online sales
• Online sales growth of 4.7% to MNOK 51.5 (MNOK 49.2)
• Hemtex revenues increased by 9.0% (-5.7%) in local currency
• Reported revenues including FX-effects increased by 2.5%
• Like-for-like growth of 7.8% (-1.9%) including online sales
• Online sales decline of -0.8% to MSEK 55.0 (MSEK 55.4).

¹ Calculated in constant currency. Actual reported revenues in Q4 2020 was MNOK 1,097.3 which gives an increase of 0.3%.

Gross margin

Group gross margin of 63.4% in Q4 Group gross margins

• Group gross margin was 63.4 % for the quarter, up by 0.3 pp compared to Q4 2020
• Kid Interior increased gross margin by 0.1 pp to 63.4% (63.3%)
• Hemtex increased gross margin by 0.9 pp to 63.5% (62.6%)
• Increased freight costs have influenced margins negatively, but has been compensated by successful campaigning, pricing, favourable product mix and improved FX-rates

EBITDA

EBITDA of 372.7 (369.6) in Q4 EBITDA Q4 2021 vs. Q4 2020

• EBITDA excl. IFRS16 of MNOK 301.5 (MNOK 299.3)
• Kid Interior EBITDA excl. IFRS16 of MNOK 203.0 (MNOK 216.6)
• The reduction in EBITDA of MNOK 13.6 was mainly caused by reduced revenues and increased employee benefits expenses
• Estimated COVID-19 cost saving effects of MNOK 2.9 ( MNOK 4.7) and bonus provision of MNOK 12.4 (MNOK 9.2)
• Hemtex EBITDA excl. IFRS16 of MNOK 98.4 (MNOK 82.7)
• The increased in EBITDA of MNOK 15.7 was mainly caused by increased revenues
• MNOK 5.0 in other income following a pay-out from the Swedish pensions association (FORA)
• Estimated COVID-19 cost saving effects of MNOK 0.0 ( MNOK 3.1) and bonus provision of MNOK 1.4 (MNOK 0.6)

Cash flow

(Amounts million) in NOK	Q4 2021	Q4 2020	FY 2021	FY 2020
cash flow from operations Net	464,2	523,9	660,5	749,2
Net Cash flow from investments	-23,8	-27,2	-79,4	-65,4
cash flow from financing Net	-293,3	-365,5	-643,7	-725,4
change in cash and cash equivalents Net	147,1	131,2	-62,6	-41,5
Cash and cash equivalents at the beginning of the period	93,0	173,7	301,3	339,2
/ (losses) Exchange gains on cash and cash equivalents	-0,8	-3,7	0,7	3,6
Cash cash equivalents at the of the and end period	239,3	301,3	239,3	301,3

Working Capital

(Amounts million) in NOK	Q4 2021	Q4 2020	FY 2021	FY 2020
Change in inventory	-66,5	76,5	-180,3	22,8
Change trade debtors in	-7,4	-10,9	-4,4	8,7
Change in trade creditors	81,7	37,3	71,2	-61,3
Change in other provisions ¹	128,9	70,2	41,6	57,2
Change in working capital	136,7	173,0	-71,9	27,3

Solid financial position and liquidity

• Cash flow from operations decreased by MNOK 59.7 compared to Q4 2020
• Negative cash effect from increased inventory because of earlier deliveries, increased number of stores and product categories expansion. MNOK 40 of the inventory increase is due to changes in payment method with neutral effect on working net capital
• Positive effect from increased trade creditors due to increased purchase/inventory, and other provisions due to increased goods in transit, increased bonus provision and public duties payable
• Cash flow from investments reflects CAPEX in stores and new online platform
• Cash flow from financing includes dividend payment of MNOK 187 in November and an MNOK 30 instalment on term loan
• Gearing ratio, excl. IFRS16 effects, of 0.53x (0.40x)
• Net interest-bearing debt excl. IFRS16 leasing liabilities of MNOK 309.1 (MNOK 220.5)
• Cash and available credit facilities of MNOK 651.3 (MNOK 678.3) by the end of the quarter

Dividend

Payout ratio 91%

• The Board of Directors will propose to the Annual General Meeting a dividend of NOK 4.00 share to be paid 27 May 2022
• Including dividend pre-payment of NOK 4.60 in November 2021, the ordinary dividends for 2021 is NOK 8.60, i.e. a payout ratio of 91%
• The proposed payout details are:
• Last day including right: 12 May 2022
• Ex-date: 13 May 2022
• Record date: 16 May 2022
• Payment date: 27 May 2022
• Date of approval: 12 May 202 (Annual General Meeting)
• Kid's dividend policy remains unchanged with a target of 80-100 percent dividend payout 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

Outlook

• Strong pipeline for optimizing the store portfolio
• New warehouse facility in Borås (Sweden) for Hemtex expected to be in operation during spring 2023
• The global freight situation which is causing delays and increased spot rates remains a challenge. However…
• Spring and summer collections expected to arrive on-time
• Signs indicating markets are normalizing, but too early to conclude
• We remain confident with regards to our Financial Objectives
• We are looking forward to presenting our 2022 Summer and Outdoor collection, and to a continued expansion of the product range in Hemtex

Q&A

Increased store portfolio activity

	Completed year to date	Signed, but not yet completed
New stores	NO: Holmestrand (Q1 21) NO: Digerneset (Q2 21) NO: Rortunet (Q4 21) NO: Mosjøen (Q4 21) NO: Storgata (Q4 21) NO: Holmlia senter (Q4 21) SE: Amiralen, Karlskrona (Q2 21) SE: Gustav Adolfs Torg, Malmö (Q3 21) SE: Folkesta, Eskilstuna (Q3 21) SE: Drottninggatan (Q4 21)	NO: Skøyen (Q2 22) NO: Bryn (Q3 22) NO: Grünerløkka (Q4 23) NO: Fredrikstad (Q4 23)
Closures	SE: 1 closed store FI: 1 closed store	SE: 2 stores
Relocations	NO: 5 stores SE: 2 store	NO: 2 stores SE: 4 stores
Refurbishment	NO: 12 stores SE: 7 stores FI: 1 store EE: 1 store	NO: 4 stores SE: 2 stores

Segment: Kid Interior

KID Interior

(Amounts millions) in NOK	Q4 2021	Q4 ¹ 2020	FY 2021	FY ¹ 2020
Revenue	687 ,4	694,2	883 1 ,5	862 8 1 ,
growth Revenue	-1,0%	% 15,3	% 1,1	16 % ,0
growth including online sales LFL	-3,8%	13,6 %	-1,8%	14,8 %
COGS	-251,9	-254,5	-702,3	-703,1
profit Gross	435,5	439,6	181 1 ,2	1 159,7
(%) Gross margin	63 % ,4	63 % ,3	62 % ,7	62 % ,3
Other operating revenue	0,0	0,1	0,5	0,2
Employee benefits expense	-116 ,7	-109,3	-367 ,2	-368 8 ,
Other operating expense	-115,8	-113,8	-395,9	-376 8 ,
Other operating effect expense - IFRS 16	39,9	8 36 ,	159,8	150,9
EBITDA	242,9	253,4	578 ,5	565,2
(%) EBITDA margin	% 35,3	36 % ,5	% 30,7	% 30,3
. of shopping days No	81	80	308	308
. of physical period end No stores at	153	147	153	147

Segment: Hemtex

Hemtex

(Amounts millions) in NOK	Q4 2021	Q4 ¹ 2020	FY 2021	FY ¹ 2020
Revenue	413,0	403,0	213,6 1	131,8 1
growth Revenue ²	% 9,0	-5,7%	% 10,1	% 1,1
growth including online sales LFL ²	7,8 %	-1,9%	9,8 %	6 % ,7
COGS	-150,6	-150,7	-457,2	-420,7
profit Gross	262,4	252,4	756,4	711,1
(%) Gross margin	63 % ,5	62 6 % ,	62 % ,3	62 8 % ,
Other operating revenue	6 ,2	0,9	9,5	1,4
Employee benefits expense	-69 ,3	-65 ,4	-250,0	-237,4
Other operating expense	-100,8	-105,2	-343,9	-349,5
Other effect operating expense - IFRS 16	31,3	33,5	127,2	138 ,7
EBITDA	129,7	116,1	299,1	264,3
(%) EBITDA margin	% 30,9	28 8 % ,	% 24,5	% 23,3
. of shopping days No	91	91	363	362
. of physical (excl franchise) No period end stores at	121	119	121	119

15 ¹ For reason of comparison, 2020 have been restated with Segment Allocated Costs. Refer attachment for details. ² Calculated in local currency Kid ASA Q4 2021

Income statement

(Amounts thousand) in NOK	Q4 2021	Q4 2020	FY 2021	FY 2020
Revenue	1 100,4	1 097,2	3 097,1	2 994,7
COGS	-402,5	-405,2	-1 159,5	128 -1 ,7
profit Gross	697 ,9	692 ,0	937,6 1	866 1 ,0
(%) Gross margin	63 % ,4	63 % ,1	62 6 % ,	62 % ,3
Other operating revenue	6 ,2	0,9	10,0	1,7
OPEX	-331,4	-323,4	-1 070,0	-1 044,1
EBITDA	372,7	369 6 ,	877 6 ,	823 6 ,
(%) margin EBITDA	% 33,7	% 33,7	28 % ,2	% 27,5
Depreciation and amortisation	-85 6 ,	-86 8 ,	-336 ,4	-340,8
EBIT	287 ,1	282 8 ,	541,2	482 ,7
(%) margin EBIT	% 25,9	25,8 %	% 17,4	16 % ,1
finance Net	-11,7	-13,9	-56 ,0	-28 ,4
Profit before tax	275,3	268 ,9	485 ,2	454,3
profit Net	219,1	209,7	384 ,4	356 ,1

Statement of financial position

(Amounts in NOK thous and)	Note	31.12.2021	31.12.2020
Assets		Unaudited	Audited
Goodwill	9	70 286	72280
Trademark	9	1511788	1515485
Other intangible assets	9	19096	5623
Deferred tax asset		22 968	15810
Total intangible assets		1624140	1609197
Right of use asset	9	756 941	821683
Fixtures and fittings, tools, office machinery and equipment	9	203 158	199512
Total tangible assets		960099	1021195
Investments in associated companies and joint ventures	10	30	0
Total financial fixed assets		30	0
Total fixed assets		2584268	2630392
Inventories		646764	482161
Trade receivables		21999	18381
Other receivables		25023	32725
Derivatives		17439	o
Totalt receivables		64 4 61	51 106
Cash and bank deposits		239 331	301 276
Total currents assets		950 556	834 542
Total assets		3534824	3464935

Total equity and liabilities		3534824	3464935
Total liabilities		2 2 7 2 1 6 2	2280333
Total short-term liabilities		970 705	918 385
Derivatives		5166	78 364
Other short-term liabilities		197865	198883
Public duties payable		172 851	167402
Tax payable		90335	87 011
Trade payable		159751	92 316
Liabilities to financial institutions	6	95000	60 297
Lease liabilities		249737	234 113
Total long-term liabilities		969 177	1046 612
Liabilities to financial institutions	6	451628	461480
Lease liabilities		517550	585131
Total provisions		332280	315 336
Deferredtax		332280	315336
Total equity		1262663	1184 601
Other equity		828 223	750164
Total paid-in-equity		434 440	434 437
Other paid-in-equity		64 617	64 617
Share premium		321050	321050
Share capital		48770	48770
Equity and liabilities		Unaudited	Audited
(Amounts in NOK thous and)	Note	31.12.2021	31.12.2020

Allocated segment costs

Segment allocated costs

									Total year	Total year
(MNOK)	Q1 2021	Q1 2020	Q2 2021	Q2 2020	Q3 2021	Q3 2020	Q4 2021	Q4 2020	2021	2020
Kid ASA and Kid Interior Segment allocated employee benefits expense Segment allocated other operating expense	0,8 1,7	2,3 0,1	5,2 1,0	2,4 0,3	3,6 1,3	3,2 0,3	6,1 2,6	2,1 1,0	15,6 6,5	10,0 1,7
Hemtex Segment allocated employee benefits expense Segment allocated other operating	-0,8 -1,7	-2,3 -0,1	-5,2 -1,0	-2,4 -0,3	-3,6 -1,3	-3,2 -0,3	-6,1 -2,6	-2,1 -1,0	-15,6 -6,5	-10,0 -1,7
expense

Quarterly revenue growth

Kid Interior					Hemtex
Total growth					Total growth
Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4
2019	8 % ,4	% 14,2	4,6 %	% 11,0	2019		-1,8 %	% 11,1	19,6 %
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
Like-for-like growth					Like-for-like growth
Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4
2019	% 5,1	% 11,0	% 2,0	8 8 % ,	2019		% 3,2	% 3,2	% 22,0
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 %

Hemtex
Total growth
Year	Q 1	Q 2	Q 3	Q 4
2019		$-1,8%$	11,1%	19,6%
2020	6,6%	14,7%	$-3,7%$	$-5,7%$
2021	6,4%	7,7%	17,4%	9,0%
Like-for-like growth
Year	Q 1	Q 2	Q 3	Q 4
2019		3,2%	3,2%	22,0%
2020	7,9%	18,0%	9,2%	$-1,9%$
2021	7,8%	9,8%	14,6 %	7,8%

Sales days and stores

Kid Interior Hemtex

Year	Q1	Q2	Q3	Q4	Total	Year	Q1	Q2	Q3	Q4	Total
2020	77	72	79	80	308	2020	90	90	92	91	363
2021	77	71	79	81	308	2021	89	90	92	91	362

2020	Q1	Q2	Q3	Q4	Total	2020	Q1	Q2	Q3	Q4	Total
New stores	0	0	0	4	4	New stores	0	0	1	1	2
Closed stores	1	0	0	0	1	Closed stores	3	0	3	0	6
Relocated stores	0	0	0	1	1	Relocated stores	0	0	1	1	2
Refurbished stores	2	2	2	2	8	Refurbished stores	3	0	2	3	8
Total number of stores	143	143	143	147		Total number of stores*	132	132	130	131
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
of Total number LFL stores	143	143	143	143		of stores* Total number LFL	127	127	127	127

Number of sales days Number of sales days

Year	O 1	O 2	Оз	Q4	Total
2020	90	90	92	Q 1	363
2021	89	90	92	91	362

Number of store projects Number of store projects

*incl franchise stores

Financial Objectives