Kid ASA — Earnings Release 2023

Feb 15, 2024

Fourth quarter in brief

• All-time high revenues and EBITDA in Q4
• Group revenues increased by 13.0% (+0.7%). In constant currency:
  • Group revenues increased by 10.2% (+2.1%)
  • LFL revenues increased by 9.3% (+1.8%)
  • Online revenues increased by 26.6% (+18.2%)
• Gross margin increased by 6.5 percentage points
• EBITDA increased by MNOK 123.1 to MNOK 419.9
• EPS of NOK 5.74 (NOK 3.91)
• Record high cash flow
• Half-year dividend payment of NOK 3.50 per share, payable in May 2024

• Another strong quarter with double-digit revenue growth
• Omnichannel and category development initiatives accelerate growth
• Extended continue to drive growth with revenues of MNOK 14.6 (MNOK 0.0) in Q4-23
• Strong development in our customer loyalty program, with more than 3 million members
• First live shopping event successfully completed
• Completed transition from SAP in Hemtex to common ERP and Point of Sale (POS) systems in the Group
• Warehouse project in Sweden on schedule

• Strong revenue development despite a challenging market
  • Group revenue growth of 7.4% (2.6%)
  • Like for like growth of 7.3% (3.1%)
  • Online growth of 20.4% (12.1%), representing 12.2% (10.9%) of total revenues
• Online revenues of MNOK 416.1 (MNOK 353.8)
  • Revenues including Click & Collect of MNOK 595.3 (MNOK 524.8)
• Increased gross margin of 3.4pp compared to previous year due to freight rates and price adjustments implemented during Q1-23
• OPEX (excl. IFRS 16) to sales ratio of 45.7% (44.9%)
• EBITDA (excl. IFRS 16) increased by MNOK 118.7
• Proposed full-year dividend of NOK 6.25 per share (incl. pre-payment of NOK 2.75 in November 2023), representing a pay-out ratio of 81%

2020 2021 2022 2023

2,995

535

591

2020 2021 2022 2023

3,097

CAGR

• 2023 has been another record year for development and innovation at Kid Group
• 2023 has been a year of strong category development contributing to growth, with Extended concept being a major initiative. This has opened the door to a significantly larger market for Kid Interior and Hemtex
• Made-to-measure module launched in Q2-23, enabling physical stores to sell technical sun screening products, contributed to strong growth
• The launch and opening of our new warehouse in Sweden, along with the decision to co-locate in 2025, lays a solid foundation for further growth
• Significant progression in the backend integration project with Hemtex, including the switch of Point of Sale (POS) and exit from SAP
• There has been significant project activity in our store portfolio across all markets
• Hemtex celebrated its 50th anniversary with a successful campaign, marking a significant milestone in our journey

Group revenues Q4 increased by 13.0% (+0.7%)

• In constant currency:
  • Group revenues increase of 10.2% (+2.1%)
  • Group like-for-like revenues increase of 9.3% (+1.8%) including online sales
  • Online growth of 26.6% (+18.2%), equivalent to an online share of 12.8%. Including click-and-collect, the online share was 18.5%
• Kid Interior revenues growth of 9.3% (+2.3%)
  • Positive contribution from Extended assortment of MNOK 14.6 (MNOK 0)
  • Like-for-like growth of 8.5% (+0.9%) including online sales
  • Online sales increase of 28.4% (+23.9%)
• Hemtex revenues growth of 19.6% (-1.9%). In constant currency:
  • Revenues growth of 11.9% (+1.7%)
  • Like-for-like growth of 10.7% (+3.5%) including online sales
  • Online sales increase of 24.8% (+12.6%)

^{367 386 456 451 458 518}

2022 2023 2022 2023 2022 2023 2022 2023 Q1 Q2 Q3 Q4

1,253

485

Strong gross margin development

• Group gross margin was 63.4% for the quarter, up by 6.5pp compared to Q4-22
  • Kid Interior gross margin increased by 7.4pp to 65.5% (58.1%)
  • Hemtex gross margin increased by 5.3pp to 60.0% (54.7%)
• Gross margin has improved as freight rates are back on historical levels, in combination with price adjustments implemented in Q1-23
• Gross margin in Q3-22, Q4-22 and Q1-23 was unusually low as the high freight rates in 2022 were not sufficiently incorporated in our price calculation models

OPEX-TO-SALES (excl. IFRS 16) of 36.7% (36.7%)

• Employee benefit expenses increased by MNOK 43.6
  • Increased bonus expenses and general salary increase
  • Increased logistics due to own employees in new Swedish warehouse
  • Tight cost control in like-for-like stores regarding working hours
  • MNOK 4.2 increase due to changes in SEKNOK exchange rate
• Other operating expenses decreased by MNOK -2.7
  • Increased marketing cost
  • Reduced electricity costs in Norway
  • Reduced logistics costs due to shift between other OPEX and employee expenses for the logistics operation in Sweden
  • MNOK 5.0 increase due to changes in SEKNOK exchange rate

376

Kid Interior Hemtex

Robust financial position

• Record levels of cash flow from operations were achieved during the fourth quarter, driven by increased profit and historically low net working capital (NWC)
• Cash flow from investments reflects mainly CAPEX relating to store openings and projects
• Cash flow from financing affected by dividend pay-out, repayment of revolving credit and overdraft facility, and increased interest expenses
• Net interest-bearing debt excl. IFRS 16 leasing liabilities of MNOK 296.6 (MNOK 475.9)
• Cash and available credit facilities of MNOK 827.1 (MNOK 552.7)
• Gearing ratio, excl. IFRS 16 effects, of 0.54x (1.12x)

	Completed 2023	Signed, but not yet completed
New stores	NO: Trondheim Torg NO: Rørvik SE: Burlöv FI: Lippulaiva, Espoo EST: Nautica Tallinn	NO: Oslo City (Q1-24) NO: Egersund (Q2-24) NO: Fredrikstad (Q4-24) NO: Grünerløkka (Q2-25) SE: Vetlanda (Q2-24) SE: Ringen, Stockholm (Q2-24)
Closures	NO: 1 store SE: 1 store FI: 2 stores	NO: 2 stores SE: 1 store
Relocations	NO: 3 stores SE: 10 stores	NO: 7 stores SE: 4 stores
Refurbishment/ expansion	NO: 9 stores SE: 2 stores FI: 1 store	NO: 3 stores SE: 2 stores
Extended	NO: Sørlandssenteret, Kristiansand NO: Ski NO: Forus NO: Dikeveien, Fredrikstad	NO: Kilen, Tønsberg (Q3-24) NO: Ålesund (Q4-24) NO: City Nord (Q2-25)

*Fully-owned stores. Hemtex has additional 11 franchise stores

• We remain optimistic of our market position and growth initiatives going forward. However, we expect continued high cost inflation in 2024.
• Due to unusually high inflation experienced across all our markets during 2023 rent index regulation for 2024 will be in the range of 5-7%, with other operating expenses being adjusted in accordance with inflation
• In H1-24, we have 9 store projects in Kid Interior and 4 in Hemtex. These projects include a combination of refurbishment, enlargement and relocations
• We will launch the Extended assortment online and in selected larger stores (+600 sqm.) in Hemtex during Q1-24
• Made-to-measure technical sun screening to be launched in Hemtex, both in physical stores and online, during Q2-24
• Continued focus on strengthening our market position in a challenging macro environment

Dividend of NOK 3.50 per share and pay-out ratio of 81%

• The Board of Directors will propose to the Annual General Meeting a dividend of NOK 3.50 per share to be paid 29 May 2024
• Including dividend pre-payment of NOK 2.75 in November 2023, the ordinary dividends for 2023 is NOK 6.25, representing a nominal increase in terms of value and pay-out ratio of 81%
• The proposed pay-out details are:
  • Last day including right: 14 May 2024
  • Ex-date: 15 May 2024
  • Record date: 16 May 2024
  • Payment date: 29 May 2024
  • Date of approval: 14 May 2024 (Annual General Meeting)

KID Interior
--------------	--	--

(Amounts in NOK millions)	Q4 2023	Q4 2022	FY 2023	FY 2022
Revenue	768.5	703.4	2,122.9	1,983.6
Revenue growth	9.3 %	2.3 %	7.0 %	5.3 %
LFL growth including online sales	8.5 %	0.9 %	6.1 %	3.2 %
COGS	-265.2	-294.7	-796.2	-828.0
Gross profit	503.3	408.7	1,326.7	1,155.6
Gross margin (%)	65.5 %	58.1 %	62.5 %	58.3 %
Other operating revenue	0.0	0.0	0.1	0.1
Employee benefits expense	-140.7	-114.8	-436.5	-392.2
Other operating expense	-133.4	-127.2	-463.9	-434.4
Other operating expense - IFRS 16 effect	46.2	41.3	189.2	168.7
EBITDA	275.4	208.0	615.5	497.9
EBITDA margin (%)	35.8 %	29.6 %	29.0 %	25.1 %
No. of shopping days No. of physical stores at period end	79 157	81 156	306 157	308 156

Hemtex
(Amounts in NOK millions)	Q4 2023	Q4 2022	FY 2023	FY 2022
Revenue	484.7	405.2	1,290.7	1,194.4
Revenue growth ¹	11.9 %	1.7 %	3.2 %	3.2 %
LFL growth including online sales ¹	10.7 %	3.5 %	4.4 %	2.8 %
COGS	-193.9	-183.4	-518.0	-503.6
Gross profit	290.8	221.8	772.6	690.8
Gross margin (%)	60.0 %	54.7 %	59.9 %	57.8 %
Other operating revenue	1.7	1.2	4.2	5.1
Employee benefits expense	-79.4	-61.6	-268.2	-237.6
Other operating expense	-107.0	-103.3	-390.0	-361.3
Other operating expense - IFRS 16 effect	38.4	30.7	150.4	122.6
EBITDA	144.5	88.8	269.0	219.7
EBITDA margin (%)	29.7 %	21.8 %	20.8 %	18.3 %
No. of shopping days	91	91	362	362
No. of physical stores at period end (excl. franchise) ¹Calculated in local currency	119	119	119	119

(Amounts in NOK thousand)	Q4 2023	Q4 2022	FY 2023	FY 2022
Revenue	1,253.2	1,108.6	3,413.6	3,178.0
COGS	-459.1	-478.1	-1,314.3	-1,331.6
Gross profit	794.1	630.4	2,099.3	1,846.4
Gross margin (%)	63.4 %	56.9 %	61.5 %	58.1 %
Other operating revenue	1.7	1.2	4.3	5.2
OPEX	-375.8	-334.9	-1,219.1	-1,134.1
EBITDA	419.9	296.8	884.5	717.5
EBITDA margin (%)	33.5 %	26.7 %	25.9 %	22.5 %
Depreciation and amortisation	-105.7	-87.4	-404.1	-348.3
EBIT	314.2	209.4	480.4	369.2
EBIT margin (%)	25.0 %	18.9 %	14.1 %	11.6 %
Net finance	-18.0	-12.8	-76.6	-47.5
Share of result from joint ventures	0.4	1.6	-1.2	-2.8
Profit before tax	296.6	198.2	402.5	318.9
Net profit	233.4	159.0	313.8	249.2

(Amounts in NOK thousand)	Note	31.12.2023	31.12.2022
Assets		Unaudited	Audited
Goodwill	9	70,169	65,479
Trademark	9	1,513,851	1,510,224
Other intangible assets	9	46,699	35,326
Deferred tax asset		6,593	1,859
Total intangible assets		1,637,312	1,612,888
Right of use asset	9	1,050,028	760,734
Fixtures and fittings, tools, office machinery and equipment	9	303,178	237,245
Total tangible assets		1,353,206	997,979
Investments in associated companies and joint ventures	10	1,013	0
Loans to associated companies and joint ventures	8	50,702	23,795
Total financial fixed assets		51,716	23,795
Total fixed assets		3,042,234	2,634,663
Inventories		576,279	668,753
Trade receivables		32,640	12,094
Other receivables		43,031	35,241
Derivatives		29,337	59,449
Totalt receivables		105,009	106,784
Cash and bank deposits		225,065	75,721
Total currents assets		906,353	851,259
Total assets		3,948,587	3,485,922

(Amounts in NOK thousand)	Note	31.12.2023	31.12.2022
Equity and liabilities		Unaudited	Audited
Share capital		48,770	48,770
Share premium		321,050	321,050
Other paid-in-equity		64,617	64,617
Total paid-in-equity		434,440	434,440
Other equity		880,840	838,940
Total equity		1,315,280	1,273,380
Deferred tax		312,218	322,723
Total provisions		312,218	322,723
Lease liabilities		779,287	523,528
Liabilities to financial institutions	6	491,661	521,646
Total long-term liabilities		1,270,947	1,045,175
Lease liabilities		305,640	258,257
Liabilities to financial institutions	6	30,000	30,000
Trade payable		203,375	122,459
Tax payable		55,813	57,745
Public duties payable		209,941	167,139
Other short-term liabilities		191,626	201,815
Derivatives		53,748	7,229
Total short-term liabilities		1,050,144	844,644
Total liabilities		2,633,310	2,212,542
Total equity and liabilities		3,948,587	3,485,922

(MNOK)	Q1 2023	Q1 2022	Q2 2023	Q2 2022	Q3 2023	Q3 2022	Q4 2023	Q4 2022	Total year 2023	Total year 2022
Kid ASA and Kid Interior
Segment allocated employee benefits expense	4.2	3.3	4.0	4.0	4.0	4.0	6.6	3.9	18.9	15.2
Segment allocated other operating expense	0.5	0.6	0.5	0.6	0.5	0.5	1.3	0.5	2.6	2.1
Hemtex
Segment allocated employee benefits expense	-4.2	-3.3	-4.0	-4.0	-4.0	-4.0	-6.6	-3.9	-18.9	-15.2
Segment allocated other operating expense	-0.5	-0.6	-0.5	-0.6	-0.5	-0.5	-1.3	-0.5	-2.6	-2.1

Group
Total growth
Year	Q1	Q2	Q3	Q4
2021	10.4 %	3.9 %	3.6 %	2.5 %
2022	9.3 %	8.8 %	0.5 %	2.1 %
2023	-1.3 %	-2.5 %	12.1 %	10.2 %
Like-for-like growth
Year	Q1	Q2	Q3	Q4
2021	9.3 %	2.9 %	0.1 %	0.2 %
2022	7.3 %	5.6 %	-0.4 %	1.8 %
2023	-0.3 %	-3.3 %	12.9 %	9.3 %

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 %	8.9 %	1.4 %	2.3 %	2022	4.8 %	8.8 %	-1.0 %	1.7 %
2023	5.2 %	-1.1 %	13.1 %	9.3 %	2023	-10.9 %	-4.8 %	10.5 %	11.9 %
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 %	5.8 %	-1.0 %	0.9 %	2022	2.0 %	5.2 %	0.8 %	3.5 %
2023	3.5 %	-2.0 %	12.7 %	8.5 %	2023	-6.5 %	-5.4 %	13.3 %	10.7 %

Kid Interior Hemtex

Number of sales days	Number of sales days
----------------------	----------------------

Year	Q1	Q2	Q3	Q4	Total	Year	Q1	Q2	Q3	Q4	Total
2022	76	72	79	81	308	2022	89	90	92	91	362
2023	77	71	79	79	306	2023	89	90	92	91	362

rear	Q1	Q2	03	Q4	Total
2022	89	90	92	ਰੇ 1	362
2023	89	90	92	ਰੇ 1	362

Number of store projects Number of store projects

2022	Q1	Q2	Q3	Q4	Total	2022	Q1	Q2	Q3	Q4	Total
New stores	0	2	0	1	3	New stores	0	0	0	2	2
Closed stores	0	0	0	0	0	Closed stores	2	1	1	0	4
Relocated stores	0	1	2	3	6	Relocated stores	3	1	2	2	8
Refurbished stores	5	3	0	1	9	Refurbished stores	1	2	1	6	10
Total number of stores	153	155	155	156		Total number of stores*	130	129	128	130
2023	Q1	Q2	Q3	Q4	Total	2023	Q1	Q2	Q3	Q4	Total
New stores	0	1	0	1	2	New stores	1	0	0	2	3
Closed stores	1	0	0	0	1	Closed stores	2	1	0	0	3
Relocated stores	4	1	0	1	6	Relocated stores	1	3	3	3	10
Refurbished stores	3	3	1	3	10	Refurbished stores	1	0	1	1	3
Total number of stores	155	156	156	157		Total number of stores*	129	128	128	130
Total number of LFL stores	152	152	152	152	Total number of LFL stores* 122				121	121

			Total	2022	Q1	Q2	Q3	Q4	Total
	0	1	3	New stores	0	0	0	2	2
0	0	0	0	Closed stores	2	1	1	0	4
1	2	3	6	Relocated stores	3	1	2	2	8
3	0	1	9	Refurbished stores	1	2	1	6	10
	2

2023	Q1	Q2	Q3	Q4	Total	2023	Q1	Q2	Q3	Q4	Total
New stores	0	1	0	1	2	New stores	1	0	0	2	3
Closed stores	1	0	0	0	1	Closed stores	2	1	0	0	3
Relocated stores	4	1	0	1	6	Relocated stores	1	3	3	3	10
Refurbished stores	3	3	1	3	10	Refurbished stores	1	0	1	1	3
Total number of stores	155	156	156	157 Total number of stores*		129	128	128	130
Total number of LFL stores	152	152	152	152 Total number of LFL stores*		122	121	121	121

*incl franchise stores

Logistic costs - Sweden

									Total year	Total year
(MSEK)	Q1 2023	Q1 2022	Q2 2023	Q2 2022	Q3 2023	Q3 2022	Q4 2023	Q4 2022	2023	2022
Employee benefits expense			2 2		4 4		2 5		11 7
Third-party logistics expense	12 1	10 5	1 7	10 9		12 4		15 4	13 9	49 1
expenses* Central warehouse	2 0	1 7	9 9	2 0	8 3	1 6	7 6	2 3	27 8	7 5
Total incl . non-recurring items	14 2	12 1	13 7	12 8	12 7	14 0	12 8	17 7	53 4	56 6
Non-recurring items
Employee benefits expense	-0 8		-0 6						-1 4
Third-party logistics expense	-2 2		-1 7		0 4				-3 5
Central warehouse expenses	-0 5								-0 5
Total excl . non-recurring items	10 7	12 1	11 4	12 8	13 1	14 0	12 8	17 7	48 0	56 6

*Excluding IFRS 16. Please note that we in 2023 have lower rental costs due to agreed discount in the lease agreement.