Musti
GROUP

October 2020 –
June 2021
Interim Report Q3/2021

1 October 2020 –
30 June 2021

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Interim Report 1 October 2020 – 30 June 2021

Continuing strong growth

April – June 2021

Group net sales totalled EUR 82.7 million (68.8 million), an increase of 20.2%.
Like-for-like sales growth was 11.6%.
Adjusted EBITA was EUR 7.3 (6.4) million, up by 13.3%.
Adjusted EBITA margin was 8.8% (9.3%).
Operating profit increased by 25.6% to EUR 5.3 (4.2) million, representing 6.4% (6.1%) of net sales.
Profit for the period totalled EUR 4.1 (4.9) million.
Earnings per share, basic was EUR 0.12 (0.14).
Number of stores grew to 308 (290).

October 2020 – June 2021

Group net sales totalled EUR 249.4 million (207.5 million), an increase of 20.2%.
Like-for-like sales growth was 12.1%.
Adjusted EBITA was EUR 25.6 (19.7) million, up by 29.6%.
Adjusted EBITA margin was 10.3% (9.5%).
Operating profit increased by 68.5% to EUR 19.8 (11.7) million, representing 7.9% (5.7%) of net sales.
Profit for the period totalled EUR 15.7 (5.9) million.
Earnings per share, basic was EUR 0.47 (0.19).
Number of stores grew to 308 (290).
Number of loyal customers grew to 1,257 thousand (1,107 thousand).

The figures in parentheses refer to the comparison period, i.e. the same period in the previous year, unless stated otherwise. Musti Group's financial year is from 1 October to 30 September.

Key figures

EUR million or as indicated	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	FY2020
Net sales	82.7	68.8	20.2	249.4	207.5	20.2	284.4
Net sales growth, %	20.2%	16.6%		20.2%	13.9%		15.3%
LFL sales growth, %	11.6%	11.5%		12.1%	11.2%		11.5%
LFL store sales growth, %	10.7%	4.3%		9.1%	7.1%		7.3%
Online share, %	24.1%	25.0%		23.4%	22.7%		22.5%
Gross margin, %	45.4%	42.6%		45.6%	43.8%		43.8%
EBITA	6.9	5.7	21.4	24.6	16.2	52.4	25.5
Adjusted EBITA	7.3	6.4	13.3	25.6	19.7	29.6	29.8
Adjusted EBITA margin, %	8.8%	9.3%		10.3%	9.5%		10.5%
Operating profit	5.3	4.2	25.6	19.8	11.7	68.5	19.6
Operating profit margin, %	6.4%	6.1%		7.9%	5.7%		6.9%
Profit/loss for the period	4.1	4.9	-15.1	15.7	5.9	168.3	11.8
Earnings per share, basic, EUR	0.12	0.14	-14.4	0.47	0.19		0.37
Net cash flow from operating activities *)	10.1	2.2	366.2	39.9	21.5	85.9	41.9
Investments in tangible and intangible assets	3.5	2.2	60.7	9.7	7.0	37.7	8.9
Net debt / LTM adjusted EBITDA	2.0	2.4	-18.6	2.0	2.4	-18.6	2.0
Number of loyal customers, thousands	1,257	1,107	13.5	1,257	1,107	13.5	1,151
Number of stores at the end of the period	308	290	6.0	308	290	6.0	293
of which directly operated	257	227	6.2	257	227	6.2	231

*) Interest and other finance income received has been reclassified from net cash flow operating activities to net cash flow from financing activities.

Musti GROUP
Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

CEO's comments

The third quarter of the financial year 2021 demonstrated once again our ability to grow sustainably quarter after quarter with increasing gross margin and we are entering the post-pandemic environment in a position of strength. Even though facing the high comparison figures from previous year, group net sales growth was 20% together with excellent improvement in gross margin. All the important indicators supporting strong and sustainable growth are going into right direction; we are constantly winning new customers, the average spend is going upwards, customer satisfaction continues to stay on a high level and the share of sales of own and exclusive products is growing. We continue to support our customers in transitioning to a post-pandemic environment and the fundamentals of our business are constant: everything we do starts and ends with our customers. I am very pleased to report another successful quarter today:

Group net sales increased by 20.2% to EUR 82.7 million in Q3. The increase was largely due to like-for-like growth in all countries and the increasing number of new customers, together with an increased number of directly operated stores. Like-for-like growth amounted to 11.6% (11.5%).
Store sales increased by 23.8% to EUR 59.9 million, driven by an increased number of stores and strong like-for-like store sales growth in all countries. Like-for-like store sales growth was 10.7% (4.3%). Store sales growth in the comparison period was negatively impacted by restrictions relating to the COVID-19 pandemic.
Online sales increased by 15.8% to EUR 19.9 million. Online sales accounted for 24.1% (25.0%) of total net sales. In the comparison period, online sales growth was positively impacted by the channel shift towards online sales due to restrictions relating to the COVID-19 pandemic.
Net cash flow from operating activities was extremely strong and totaled EUR 10.1 million (EUR 2.2 million).

The Pet Parenting trend has been continuing strong, and the favorable trend in puppy registrations keeps getting stronger. Puppy registrations in Sweden were up again by 16% in June 2021 compared to corresponding month in 2020 and what is most important, the growth in Musti Group's new puppy customers continues stronger than ever. In June 2021, we received an all-time high number of new puppy customers, an increase of 33% compared to the corresponding month previous year. Given the strong underlying market development, we are utilizing the momentum and investing heavily on sales growth to reach out to more new customers and to develop an ecosystem for Pet Parents to further increase attractiveness and customer loyalty. This reflects our strategy and supports the mid- and long-term financial targets, and we are well on track to reach the updated sales and margin targets set in May 2021.

In June 2021 we successfully concluded negotiations with franchisees of all 16 stores operating under franchising agreement in Finland. After the transactions are finished in Q4 2021, all stores in Finland are directly operated. As a result of both strong organic growth and accelerated acquisitions, we have upgraded our estimate of increase in own directly operated stores to 45-55 stores during the financial year. The rapid store expansion, focusing on building a seamless ecosystem for the growing number of customers and strengthening the assortment of own and exclusive products has added costs in a short-term, but will pay back in the longer term.

The Group's adjusted EBITA increased by 13.3% to EUR 7.3 million in Q3. The increase was due to sales growth. Adjusted EBITA margin was 8.8% (9.3%). The comparison period's cost structure was positively impacted by lower working hours in our stores and lower operating costs driven by the COVID-19 pandemic. This year, quarterly adjusted EBITA margin development was in line with periods prior to the COVID-19 pandemic, where Q3 has normally been the quarter with the lowest profitability driven by lower volume and margins. Adjusted EBITA was still negatively impacted by EUR 0.3 million by the low efficiency in Eskilstuna driven by the warehouse consolidation project that was executed in Q1 2021. However, the efficiency has improved as planned and is expected to normalize by the end of Q4. I am extremely pleased with the gross margin development. Gross margin increased to 45.4% (42.6%) as a result of lower share of online sales, more efficient marketing campaigns, favorable product mix and efficient supply chain management. Operating profit increased by 25.6% to EUR 5.3 million.

Adjusted EBITA margin increased to 12.4% in Sweden and 16.3% in Norway. In Finland, adjusted EBITA margin decreased slightly from the comparison period to 21.8%. However, especially in Finland, the comparison period was positively impacted by cost savings in relation to the COVID-19 pandemic, mainly caused by lower working hours. Hence, adjusted EBITA in Q3 2021 was more in line with periods prior to the COVID-19 pandemic.

Our focus remains on making the life of pets and their parents easier, safer and more fun. For the benefit of our customers, business and shareholders, we are determined to continuously improve our performance and do things a bit better every single day. Our personnel prove their expertise and genuine will to serve our customer in the best possible way every day, which I want to sincerely thank them all for.

David Rönnberg, CEO

Musti GROUP

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

Financial targets

The long-term financial targets updated by the Board of Directors on 3 May 2021 are:

Growth	Net sales to reach at least EUR 500 million by the financial year 2024 by continuation of strong customer acquisition momentum and increasing share of wallet.
Profitability	Mid- to long-term adjusted EBITA margin of at least 13 per cent with steadily improving profile. Margin increase is expected to be realised through steady gross margin and improving operating leverage.
Capital structure	Maintain net debt in relation to adjusted EBITDA below 2.5x in the long term.
Dividend policy	To pay a dividend corresponding to 60-80 per cent of net profit. Any potential dividend shall take into account acquisitions, the company's financial position, cash flow and future growth opportunities.

The financial targets are forward-looking statements and are not guarantees of future financial performance.

Market outlook

Musti Group operates in the Nordic pet care market, broadly defined as the sale of pet food, treats, products, services and veterinary care across Finland, Sweden and Norway. The market was estimated to be worth approximately EUR 2.9 billion (in 2019), with Sweden as the largest market, accounting for approximately EUR 1.2 billion, and Finland and Norway estimated to be similar in size, at approximately EUR 0.9 billion and approximately EUR 0.8 billion, respectively.

"Pet Parenting" refers to the tendency of people to treat their pets like family members. As a result of this trend, people are spending more on higher quality and more premium food, as well as a more diverse range of products and services. This underlying trend that drives the long-term structural growth of the pet care market remains robust, shifting spend towards higher quality nutrition, a more diverse range of accessories and wider adoption of services. The COVID-19 pandemic has affected market dynamics since spring 2020 mainly through an increased number of puppies and kittens, in line with historical evidence of developments during economic downturns, and increased demand in online channels.

The pet care market is resilient, underpinned by non-discretionary purchasing behaviour. Non-discretionary categories such as food, cat litter and veterinary services make up approximately 75% of total market spend and are characterised by repeat purchasing behaviour that is consistent through the cycle. Consumers display willingness to sustain spending on non-discretionary pet care purchases even while expenditure on alternative categories has been affected.

Musti GROUP

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

Group performance

Net sales

EUR million	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	FY2020
Net sales
Group	82.7	68.8	20.2	249.4	207.5	20.2	284.4
Finland	36.2	32.0	13.2	112.4	99.8	12.6	135.8
Sweden	36.4	30.1	20.7	107.7	89.8	19.9	123.2
Norway	10.0	6.6	51.9	29.3	17.9	63.7	25.4

April-June 2021

Group net sales increased by 20.2% to EUR 82.7 million (EUR 68.8 million). The increase was largely due to like-for-like growth in all countries and the increasing number of new customers together with an increased number of directly operated stores. Like-for-like growth amounted to 11.6% (11.5%). Strengthened SEK exchange rate increased sales by EUR 1.6 million, whereas strengthened NOK exchange rate increased sales by EUR 0.2 million.

Store sales increased by 23.8% to EUR 59.9 million (EUR 48.4 million), driven by an increased number of stores and strong like-for-like store sales growth in all countries. Like-for-like store sales growth amounted to 10.7% (4.3%). Store sales growth in April-June 2020 was negatively impacted by restrictions relating to the COVID-19 pandemic. Online sales increased by 15.8% to EUR 19.9 million (EUR 17.2 million). Online sales accounted for 24.1% (25.0%) of total net sales. In April-June 2020, online sales growth was positively impacted by the channel shift towards online sales due to restrictions relating to the COVID-19 pandemic.

Net sales in Finland increased by 13.2% driven by like-for-like growth of 10.7% and growth from the new stores opened and acquired during the latest twelve months. During Q3, two directly operated stores were opened. Net sales in Sweden increased by 20.7% driven by strong like-for-like growth of 10.2%. In addition, the strengthened SEK rate compared to Q3 FY20 had a positive impact on the sales growth. During Q3, two directly operated stores were opened and three franchise stores were acquired in Sweden. Net sales in Norway increased by 51.9% driven by strong like-for-like growth of 21.0% and the ramp-up of the stores opened during the latest twelve months. The strengthened NOK rate compared to Q3 FY20 had a slightly positive impact on growth. During Q3, three directly operated stores were opened in Norway.

The number of loyal customers increased to 1,257 thousand during the reporting period (1,151 thousand on 30 September 2020). Rolling 12 months average spend per loyal customer increased to EUR 188.6 as per 30 June 2021 (EUR 178.0 as per 30 June 2020), driven by an increased average purchase value.

October 2020 – June 2021

The Group's net sales increased by 20.2% to EUR 249.4 million (EUR 207.5 million). The increase was largely due to like-for-like growth in all countries and the increasing number of new customers and an increased number of directly operated stores. Like-for-like growth amounted to 12.1% (11.2%). Strengthened SEK exchange rate increased sales by EUR 4.7 million, whereas strengthened NOK exchange rate increased sales by EUR 0.7 million.

Store sales increased by 20.9% to EUR 181.5 million (EUR 150.2 million), driven by an increased number of stores and strong like-for-like store sales growth especially in Sweden and Norway. Like-for-like store sales growth amounted to 9.1% (7.1%). Online sales increased by 23.7% to EUR 58.3 million (EUR 47.1 million). Online sales accounted for 23.4% (22.7%) of total net sales. In October 2019-June 2020, online sales growth was positively impacted by the channel shift towards online sales due to the COVID-19 pandemic and a focus on growth in all countries.

Net sales in Finland increased by 12.6% driven by like-for-like growth of 11.1% and growth from the new stores opened and acquired during the latest twelve months. During the reporting period, five directly operated stores were opened and one franchise store was acquired in Finland. In addition, one directly operated store was closed. Net sales in Sweden increased by 19.9% driven by good like-for-like growth of 8.8%. Online sales in Sweden were lower due to lower campaign activities in connection with the warehouse consolidation project. In addition, the strengthened SEK rate compared to the corresponding reporting period in FY20 had a positive impact on the sales growth. During the reporting period, five directly operated stores was opened and eight franchise stores were acquired in Sweden. In addition, one directly opened store was

Musti GROUP

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

closed and two franchise agreements were terminated. Net sales in Norway increased by 63.7% driven by strong like-for-like growth of 33.5% and the ramp-up of the stores opened during the latest twelve months. The strengthened NOK rate compared to the corresponding reporting period in FY20 had a positive impact on growth. During the reporting period, nine directly operated store were opened in Norway.

Net sales by segment 10/2020-6/2021

Net sales by channel 10/2020-6/2021

*Other sales include franchise fees and wholesale.

Result

April – June 2021

The Group's adjusted EBITA increased by 13.3% to EUR 7.3 million (EUR 6.4 million). The increase was due to sales growth. Adjusted EBITA margin was 8.8% (9.3%). April-June 2020 was positively impacted by lower working hours in our stores and lower operating costs driven by the COVID-19 pandemic. This year, quarterly adjusted EBITA margin development was in line with periods prior to the COVID-19 pandemic, where April-June has normally been the quarter with the lowest profitability driven by lower volume and margins. In addition, Musti Group has focused on sales growth in order to utilize the strong momentum and to develop an ecosystem for pet parents to further increase attractiveness and customer loyalty. These projects have generated additional costs during Q3 FY21.

Adjusted EBITA was still negatively impacted by EUR 0.3 million due to low efficiency in Eskilstuna driven by the warehouse consolidation project that was executed in Q1 FY21. However, the efficiency has improved as planned and is expected to normalize by the end of Q4 FY21.

Gross margin increased to 45.4% (42.6%) due to lower share of online sales, more efficient marketing campaigns, favourable product mix and efficient supply chain management. In addition, increasing freight costs from Asia had a negative impact. Share of sales of own and exclusive brands increased to 49.9% (48.5%). The share of employee benefit and other operating expenses as percentage of sales increased to 30.9% (28.3%) driven by focus on sales growth, development of an ecosystem for pet parents and lower efficiency in the central warehouse in Eskilstuna due to warehouse consolidation project that was completed in Q1.

Depreciation amounted to EUR 5.6 million (EUR 4.7 million) and amortisation amounted to EUR 1.7 million (EUR 1.5 million).

Adjustments to EBITA were EUR 0.3 million (EUR 0.7 million). The adjustments related to the reorganization of customer services that was finalized during the quarter and other non-recurring projects.

Operating profit increased by 25.6% to EUR 5.3 million (EUR 4.2 million).

Profit before taxes decreased to EUR 4.9 million (EUR 6.0 million). The impact of financial income and expenses (net) on profit before taxes was EUR 0.4 million negative (EUR 1.8 million positive), mainly due to lower impact on foreign exchange gains.

Profit for the period was EUR 4.1 million (EUR 4.9 million) and basic earnings per share was 0.12 (0.14). The effective tax rate was 16.1%. Musti is currently subject to a tax audit of Musti Group Oyj, Musti Group Finland Oy and Musti Group Nordic Oy regarding financial years 2018-2020. Musti Group has in June 2021 received a tax audit report from the Finnish tax authorities. The tax audit report included subsequent taxes and tax increases amounting to a total of EUR 0.9 million, relating to the tax deductibility of IPO related costs. The Group disagrees with the interpretation made in the tax audit. If the companies are to

Musti Group's October 2020 - June 2021 Interim Report Q3 2021

10 August 2021

be reassessed in accordance with the interpretations set out in the tax audit reports, the companies will file a claim for adjustment to the Finnish Tax Administration's Assessment Adjustment Board.

October 2020 – June 2021

The Group's adjusted EBITA increased by 29.6% to EUR 25.6 million (EUR 19.7 million). Adjusted EBITA margin was 10.3% (9.5%). The improvement was mainly due to an increase in sales combined with operating leverage, partly offset by additional costs driven by lower efficiency in the central warehouse in Eskilstuna due to the warehouse consolidation project that was completed in Q1, focus on sales growth in order to utilize the strong momentum and to develop an ecosystem for pet parents to further increase attractiveness and customer loyalty.

Gross margin increased to 45.6% (43.8%) due to more efficient marketing campaigns, favourable product mix and efficient supply chain management, partly offset by higher share of online sales. Share of sales of own and exclusive brands increased to 50.9% (50.3%). The share of employee benefit and other operating expenses as percentage of sales decreased to 29.9% (30.0%) driven by operating leverage and efficient store operations, partly offset by additional costs driven by lower efficiency in the central warehouse in Eskilstuna due to the warehouse consolidation project that was completed in Q1, focus on sales growth and to develop an ecosystem for pet parents to further increase attractiveness and customer loyalty.

Depreciation amounted to EUR 16.1 million (EUR 13.3 million) and amortisation amounted to EUR 4.9 million (EUR 4.4 million).

Adjustments to EBITA were EUR 0.9 million (EUR 3.6 million). The adjustments related to the warehouse consolidation project, reorganization of customer services and other non-recurring projects.

Operating profit increased by 68.5% to EUR 19.8 million (EUR 11.7 million).

Profit before taxes increased to EUR 19.3 million (EUR 7.3 million). The impact of financial income and expenses (net) on profit before taxes was EUR 0.5 million negative (EUR 4.5 million negative), mainly due to lower impact on foreign exchange gains and losses and lower interest expenses due to the refinancing in connection with the IPO.

Profit for the period was EUR 15.7 million (EUR 5.9 million) and basic earnings per share was 0.47 (0.19). The effective tax rate was 18.5%.

Financial position and cash flow

In April-June, net cash flow from operating activities totalled EUR 10.1 million (EUR 2.2 million). During the quarter, net working capital decreased by EUR 2.6 million due to higher trade and other payables and lower inventory. Cash and cash equivalents at the end of the period amounted to EUR 13.5 million (30 September 2020: EUR 21.6 million). Total consolidated assets amounted to EUR 330.6 million (30 September 2020: EUR 312.3 million). The increase was due to increased right-of-use assets and property, plant and equipment due to increased number of stores, increased goodwill driven by business combinations and stronger SEK exchange rate, as well as inventories in stores and the central warehouse.

Equity attributable to owners of the parent company totalled EUR 153.1 million (30 September 2020: EUR 153.1 million). Equity was increased due to the profit of the period, partly offset by the payment of the capital return of EUR 0.38 per share. During the reporting period Musti Group acquired 61.000 own shares totalling EUR 1.9 million which decreased equity.

Gearing at the end of the reporting period was 73.6% (30 September 2020: 61.8%) and net debt amounted to EUR 112.8 million (30 September 2020: EUR 94.7 million). The increase was mainly due to increased lease liability. At the end of the period, the lease liabilities included in net debt amounted to EUR 76.2 million (30 September 2020: EUR 66.5 million).

Musti Group focuses on maintaining sufficient liquidity in the group. In addition to the cash and cash equivalents of EUR 13.5 million at the end of the period, Musti Group has an unutilized EUR 4.0 million credit limit and an undrawn EUR 10.0 million revolving credit facility.

Investments

In April-June investments in tangible and intangible assets amounted to EUR 3.5 million (EUR 2.2 million). The investments were mainly related to new and relocated stores, as well as IT and digital platform development projects. In addition, EUR 3.9 million relates to acquisitions of three franchise stores and acquisitions of 100% of the shares of Calida AB and Lomiwa AB, which operate two franchise stores in Sweden.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

part of Musti Group during Q4 2021. After the transactions are finished, all stores in Finland are directly operated. The total purchase price will amount to approx. EUR 2 million.

Business segment performance

Musti Group's reporting segments are based on geographical regions, and they are Finland, Sweden and Norway. The segment structure is based on geographical division where Finland, Sweden and Norway are separated to individual operating segments based on how the chief operating decision-maker monitors the business operations. In other items, Musti Group reports the Group functions, including the operations of the headquarters and the central warehouse.

Finland

Finland is Musti Group's most mature country. Musti Group held 30% of the total pet food and products market share in 2019. Regardless of the strong market presence in Finland, the company's management continues to see opportunities to expand the store network in selected locations, such as high traffic hypermarkets. Musti's brands in Finland include Musti ja Mirri (store and omnichannel) and Peten Koiratarvike (online).

In Finland, Musti Group will continue to focus on serving existing customers better in order to increase share of wallet and winning new customers, both of which will support positive like-for-like development.

EUR million or as indicated	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	FY2020
Net sales	36.2	32.0	13.2	112.4	99.8	12.6	135.8
Net sales growth, %	13.2%	10.0%		12.6%	10.3%		10.6%
LFL segment sales growth, %	10.7%	6.2%		11.1%	6.6%		7.4%
EBITA	7.9	7.3	8.8	26.3	23.5	11.9	32.8
EBITA margin, %	21.8%	22.6%		23.4%	23.6%		24.2%
Adjusted EBITA	7.9	7.3	7.6	26.3	23.6	11.5	33.0
Adjusted EBITA margin, %	21.8%	22.9%		23.4%	23.6%		24.3%
Number of stores	133	129	3.1	133	129	3.1	129
of which directly operated	117	111	5.4	117	111	5.4	112

April – June 2021

Net sales in Finland increased by 13.2% to EUR 36.2 million (EUR 32.0 million) driven by like-for-like growth of 10.7% and growth from the stores opened or acquired during the latest twelve months.

EBITA increased by 8.8% to EUR 7.9 million (EUR 7.3 million). Adjusted EBITA increased by 7.6% to EUR 7.9 million (EUR 7.3 million). Store efficiency continued to be on a good level. However, April-June 2020 was positively impacted by cost savings in relation to the COVID-19 pandemic. Hence, adjusted EBITA is more in line with periods prior to the COVID-19 pandemic. Adjusted EBITA margin was 21.8% (22.9%).

During Q3, two directly operated stores were opened.

October 2020 – June 2021

Net sales in Finland increased by 12.6% to EUR 112.4 million (EUR 99.8 million) driven by like-for-like growth of 11.1% and growth from the stores opened or acquired during the latest twelve months.

EBITA increased by 11.9% to EUR 26.3 million (EUR 23.5 million). Adjusted EBITA increased by 11.5% to EUR 26.3 million (EUR 23.6 million). This was due to operating leverage, more efficient marketing campaigns and supply chain management, offset by the increased share of online sales. Store efficiency continued to be on a good level. However, April-June 2020 was positively impacted by cost savings in relation to the COVID-19 pandemic. Adjusted EBITA margin was 23.4% (23.6%).

During the reporting period, five directly operated stores were opened and one franchise store was acquired in Finland.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Sweden

In Sweden, Musti Group's focus is on further expansion and convergence in efficiency towards Finnish levels. Musti, through its multiple brands, is the overall market leader with a combined 29% market share (2019). Through VetZoo and Animail, Musti Group has a strong online presence in Sweden with approximately 50% market share in online sales. Musti Group's store and omnichannel brands in Sweden are Arken Zoo and Djurmagazinet.

Musti's goal in Sweden is to continue strong like-for-like growth across all channels, store network expansion and strong margin improvement development. Regarding the store network expansion, focus will be turned towards store roll-out especially in big cities, where Musti is currently under-represented. Key growth and margin drivers in Sweden include increasing own and exclusive brands' share of sales towards Finnish levels through staff promotion and educational marketing, converging store cost-efficiency towards Finnish levels through store personnel efficiency measures and being selective in network expansion while acquiring selected franchised stores.

EUR million or as indicated	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	FY2020
Net sales	36.4	30.1	20.7	107.7	89.8	19.9	123.2
Net sales growth, %	20.7%	16.8%		19.9%	12.4%		14.7%
LFL segment sales growth, %	10.2%	13.0%		8.8%	14.1%		13.4%
EBITA	4.5	3.1	44.6	14.2	9.9	43.6	14.5
EBITA margin, %	12.3%	10.3%		13.2%	11.0%		11.7%
Adjusted EBITA	4.5	3.2	42.2	14.6	9.9	46.4	14.9
Adjusted EBITA margin, %	12.4%	10.5%		13.5%	11.1%		12.1%
Number of stores	127	123	3.3	127	123	3.3%	125
of which directly operated	92	78	17.9	92	78	17.9%	80

April – June 2021

Net sales in Sweden increased by 20.7% to EUR 36.4 million (EUR 30.1 million) driven by like-for-like growth of 10.2%. The average SEK rate strengthened in Q3 FY21 compared to Q3 FY20. This had a EUR 1.6 million positive impact on net sales. The sales growth was strong in both stores and online, driven by the increased number of customers.

EBITA increased by 44.6% to EUR 4.5 million (EUR 3.1 million). Adjusted EBITA increased by 42.2% to EUR 4.5 million (EUR 3.2 million). This was due to operating leverage and more efficient marketing campaigns, partly offset by the increased share of online sales. Store efficiency continued to be on a good level. Adjusted EBITA margin was 12.4% (10.5%).

During Q3, two directly operated stores were opened and three franchise stores were acquired in Sweden.

October 2020 – June 2021

Net sales in Sweden increased by 19.9% to EUR 107.7 million (EUR 89.8 million) driven by like-for-like growth of 8.8%. The average SEK rate strengthened compared to the corresponding reporting period in FY20. This had a EUR 4.7 million positive impact on net sales. The sales growth was strong in both stores and online, driven by the increased number of customers. Online sales were lower due to lower campaign activities in connection with the warehouse consolidation project.

EBITA increased by 43.6% to EUR 14.2 million (EUR 9.9 million). Adjusted EBITA increased by 46.4% to EUR 14.6 million (EUR 9.9 million). This was due to operating leverage and more efficient marketing campaigns, partly offset by the increased share of online sales. Store efficiency continued to be on a high level. Adjusted EBITA margin was 13.5 (11.1%).

During the reporting period, five directly operated store was opened and eight franchise stores were acquired in Sweden. In addition, one directly opened store was closed and two franchise agreements were terminated.

Norway

In Norway, Musti Group's focus is on store roll-out and on increasing country profitability. Unlike in Finland and Sweden, there are no clear dominant players within the pet specialty segment, with Musti covering for roughly 8% of the total pet food and products market in 2019. Musti Group's brands in Norway are Musti (store and omnichannel) and VetZoo (online).

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

In Norway, the focus is on continuing the expansion of the store network and store ramp-up in line with their historical development, as well as on the strong margin improvement development as most of the stores are still in ramp-up phase. Ramp-up of the Norwegian stores has progressed according to Musti Group's plans and the profitability development of new stores has followed similar patterns as observed e.g. in Finland.

EUR million or as indicated	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	FY2020
Net sales	10.0	6.6	51.9	29.3	17.9	63.7	25.4
Net sales growth, %	51.9%	62.9 %		63.7%	52.5 %		54.6%
LFL segment sales growth, %	21.0%	44.8 %		33.5%	32.5 %		33.3%
EBITA	1.6	1.0	60.6	5.0	1.8	183.3	2.9
EBITA margin, %	16.3%	15.4 %		17.0%	9.8 %		11.4%
Adjusted EBITA	1.6	1.0	58.0	5.0	1.8	182.3	2.9
Adjusted EBITA margin, %	16.3%	15.7 %		17.1	9.9 %		11.5%
Number of stores	48	38	26.3	48	38	26.3	39
of which directly operated	48	38	26.3	48	38	26.3	39

April – June 2021

Net sales in Norway increased by 51.9% to EUR 10.0 million (EUR 6.6 million), driven by strong like-for-like growth of 21.0% and ramp-up of the stores opened during the latest twelve months. The strengthened NOK exchange rate in Q3 FY21 compared to Q3 FY20 had a EUR 0.2 million positive impact on net sales.

EBITA and adjusted EBITA amounted to EUR 1.6 million (EUR 1.0 million). This was driven by operating leverage and increased store efficiency, as more stores are reaching the mature phase or the end of the ramp-up curve. Store efficiency continued to be on a high level. Adjusted EBITA margin was 16.3% (15.7%).

During Q3, three directly operated store were opened in Norway.

October 2020 – June 2021

Net sales in Norway increased by 63.7% to EUR 29.3 million (EUR 17.9 million), driven by strong like-for-like growth of 33.5% and ramp-up of the stores opened during the latest twelve months. The strengthened NOK exchange rate in FY21 compared to FY20 had a EUR 0.7 million positive impact on net sales.

EBITA and adjusted EBITA amounted to EUR 5.0 million (EUR 1.8 million). This was driven by operating leverage and increased store efficiency, as more stores are reaching the mature phase or the end of the ramp-up curve. Store efficiency continued to be on a good level. Adjusted EBITA margin was 17.1% (9.9%).

During the reporting period, nine directly operated store were opened in Norway.

Group functions

April – June 2021

The EBITA impact of Group functions was EUR -7.1 million (EUR -5.7 million). Adjusted EBITA was EUR -6.8 million (EUR -5.1 million). The decrease was mainly due to increased headcount in the head office, and, higher costs in the central warehouse driven by higher volumes. Musti Group has focused on sales growth in order to utilize the strong momentum and to develop an ecosystem for pet parents to further increase attractiveness and customer loyalty. These projects have generated additional costs during Q3 FY21. In addition, lower efficiency increased personnel and other costs in Eskilstuna due to the warehouse consolidation project. Adjusted EBITA margin from the group's total net sales was -8.2% (-7.5%).

October 2020 – June 2021

The EBITA impact of Group functions was EUR -20.8 million (EUR -19.0 million). Adjusted EBITA was EUR -20.3 million (EUR -15.6 million). The increase was mainly due to increased headcount in the head office, and, higher costs in the central warehouse driven by higher volumes. Musti Group has focused on sales growth in order to utilize the strong momentum and to develop an ecosystem for pet parents to further increase attractiveness and customer loyalty. These projects have

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

generated additional costs during Q3 FY21. In addition, lower efficiency increased personnel and other costs in Eskilstuna due to the warehouse consolidation project. Adjusted EBITA margin was -8.1% (-7.5%).

Personnel

At the end of June 2021, the number of personnel was 1,318 (1,171), of whom 578 (598) were employed in Finland and 740 (573) outside Finland.

Changes in Group composition

On 1 January 2021, Musti Group acquired Calida AB and Lomiwa AB, which operate two franchise stores in Sweden. The acquisitions complements Musti Group's existing Arken Zoo chain in Sweden.

In April 2021, Musti Group sold its ownership in the Swedish subsidiaries Anivet AB, Carnia AB, Tasso i Malmö AB and ZooZoocom AB.

On 30 April 2021 Musti Group's Swedish subsidiaries Calida AB, Lomiwa AB and VetZoo AB were merged into Musti Group's Swedish subsidiary Arken Zoo Nord AB.

On 10 June 2021 Musti Group's Swedish subsidiaries Aeris Hund & Häst AB, Animail AB, Djurintressenterna i Sverige AB and Grizzly Zoo AB were merged into Musti Group's Swedish subsidiary Arken Zoo Syd AB.

Changes in Group management

On 16 April Musti Group announced, that Robert Berglund, CFO and member of the Management Team of Musti Group, has announced that he will resign from the company. The resignation will take effect in October 2021.

On 2 June Musti Group announced the appointment of Toni Rannikko as a new CFO and member of the Management Team of Musti Group as of 1 September 2021.

Governance

Annual General Meeting

Musti Group plc's Annual General Meeting was held on 21 January 2021 at Musti Group headquarters in Helsinki, Finland. Shareholders and their proxy representatives could participate in the Annual General Meeting and exercise their rights only by voting in advance and by making counterproposals and presenting questions in advance. It was not possible to participate at the meeting venue in person. The Annual General Meeting was arranged in accordance with an exceptional meeting procedure based on the temporary legislation to limit the spread of the COVID-19 pandemic approved by the Finnish Parliament.

The documents of the Annual General Meeting held on 21 January 2021 are available at www.mustigroup.com/agm.

Shares and shareholders

Share capital

At the end of the reporting period on 30 June 2021, Musti Group's share capital was EUR 11,001,853.68 and total number of shares outstanding was 33,535,453. The company has one share class. Each share carries one vote and entitles to the same dividend.

Trading of shares

Trading of Musti Group's share commenced on the Prelist of Nasdaq Helsinki Ltd on 13 February 2020 and on the Official List on 17 February 2020.

The opening price of the share was EUR 27.52 on the first trading day of the third quarter on 1 April 2021. The closing price of the share on the last trading day of the reporting period on 30 June 2021 was EUR 31.22. The highest price of the share during April – June 2021 was EUR 34.14, the lowest EUR 27.52 and the average closing price was EUR 30.80. Share turnover on Nasdaq Helsinki during April – June 2021 was approximately 4.64 million shares.

Musti Group's market capitalization was EUR 1.05 billion on 30 June 2021.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Own shares

On 30 June 2021 Musti Group held 183,000 (0) own shares representing 0.55% (0.00%) of the total number of shares and votes. During the reporting period Musti Group exercised the authorisation granted by the AGM on 21 January 2021 to the Board of Directors to acquire own shares and acquired in total 61 000 own shares.

Authorizations of the Board of Directors

The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the Musti Group's own shares and/or on the acceptance as pledge of the company's own shares. The amount of own shares to be repurchased and/or accepted as pledge based on this authorization shall not exceed 3,185,000 shares in total, which corresponds to approximately 9.5 per cent of all of the shares in Musti Group. However, the company together with its subsidiaries cannot at any moment own and/or hold as pledge more than 10 per cent of all the shares.

Own shares can be repurchased only using the unrestricted equity of the company at a price formed in public trading on the date of the repurchase or otherwise at a price determined by the markets. The Board of Directors decides on all other matters related to the repurchase and/or acceptance as pledge of own shares. Own shares can be repurchased using, inter alia, derivatives. Own shares can be repurchased otherwise than in proportion to the shareholdings of the shareholders (directed repurchase). This authorization cancels previous unused authorizations to repurchase the Company's own shares and/or to accept the Company's own shares as pledge. The authorization is effective until the next Annual General Meeting, however, no longer than until 21 July 2022.

The Annual General Meeting also authorized the Board of Directors to decide on the issuance of shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of the Finnish Companies Act as follows. The amount of shares to be issued based on this authorization shall not exceed 3,185,000 shares, which corresponds to approximately 9.5 per cent of all of the shares in Musti Group.

The authorization covers both the issuance of new shares as well as the transfer of own shares held by the company. The Board of Directors decides on all the conditions of the issuance of shares and of special rights entitling to shares. The issuance of shares and of special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue). This authorization cancels previous unused authorizations to decide on the issuance of shares as well as on the issuance of special rights entitling to shares. The authorization is effective until the next Annual General Meeting, however, no longer than until 21 July 2022.

Shareholders and flagging notifications

At the end of the reporting period, the number of registered shareholders was 9,954. The proportion of nominee-registered and foreign shareholders was 71.59% of the company's shares. The 20 largest shareholders registered in the book-entry register maintained by Euroclear Finland Oy held a total of 19.56% of Musti Group's shares and votes at the end of the reporting period.

During October 2020-June 2021, Musti Group received the following announcement under Chapter 9, Section 5 of the Securities Markets Act:

On 16 November 2020 Musti Group plc received a notification according to which Millan Holding S.à.r.l., a company ultimately owned by EQT and its co-investors, had sold a total number of 1,878,862 company's shares. As a result of the share sale, EQT's indirect holding of the shares and votes of the Musti Group decreased below 5 percent and totalled to 0 shares and votes in the company.

A list of the largest shareholders is available on the company's website at www.mustigroup.com/investors

Managers' transactions

Musti Group's managers' transactions as of the listing have been published as stock exchange releases, and they are available on the company's website at www.mustigroup.com

Remuneration schemes

The Board of Directors decides on Musti Group's remuneration schemes and plans, such as short- and long-term incentive schemes as well as pension arrangements, upon the recommendation of the Remuneration Committee and in accordance with the company's effective remuneration policy. Musti Group will present a remuneration policy for approval to the shareholders for the first time at the Annual General Meeting 2021.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Bonus scheme

The company operates a bonus scheme, which is determined by the Board of Directors of the company upon the recommendation of the Remuneration Committee and in accordance with the company's effective remuneration policy. The CEO and the members of the management team are eligible to participate in the bonus scheme in accordance with the company's bonus policy. The payment of annual bonuses is conditional upon attainment of key performance targets of the company.

The bonuses of the CEO and the management team are based on personal targets and certain profitability targets set for the financial year. The maximum performance bonus is equivalent to an eight months' full salary for the CEO and a four months' full salary for the members of the management team.

Long-term incentives

In May 2020, Musti Group plc's Board decided on two new share-based long-term incentive plans for the management team and key employees. The plans consist of a performance share plan (PSP) as the main structure, and of a restricted share plan (RSP), which is a complementary share plan for special situations. The new share-based compensation schemes were communicated in a stock exchange release on 7 May 2020. The plans will form a part of Musti Group plc's remuneration programs for its key employees, and the aim of the PSP is to align the objectives of the shareholders and key employees for increasing the value of the Company in the long-term, to commit the key employees to the Company and to offer them competitive incentive schemes that are based on earning and accumulating shares.

The performance share plan consists of three performance periods of three years each 2020-2022, 2021-2023 and 2022-2024. The Board of Directors will decide separately for each performance period the plan participants, performance criteria, and the related targets, as well as the minimum, target, and maximum reward potentially payable based on target attainment.

The Restricted Share Plan (RSP) consists of plans on which the vesting period is 12-36 months based on decisions made by the Board of Musti Group plc. The possible rewards are paid partly in Musti Group plc's shares and partly in cash. As of 31 March 2021, there were no participants added to the RSP plan.

In the performance period FY2020-2022, the plan has 11 participants at most and the targets for the performance period relates to company's total shareholder return (TSR) and adjusted EBITA. The maximum number of shares to be paid based on the performance period FY2020-2022 is approximately 250.000 Musti Group plc's shares. The number of shares represents gross earning, from which the withholding of tax and possible other applicable contributions are deducted, and the remaining net amount is paid in shares. However, the company has the right to pay the reward fully in cash under certain circumstances. Potential rewards from the performance period FY2020-2022 will be paid out during autumn of 2022.

In the performance period FY2021-2023, the plan has 29 participants at most and the targets for the performance period relates to company's total shareholder return (TSR) and adjusted EBITA. The maximum number of shares to be paid based on the performance period FY2021-2023 is approximately 130,000 Musti Group plc's shares. The number of shares represents gross earning, from which the withholding of tax and possible other applicable contributions are deducted, and the remaining net amount is paid in shares. However, the company has the right to pay the reward fully in cash under certain circumstances. Potential rewards from the performance period FY2020-2023 will be paid out during autumn of 2023.

Responsibility

Musti Group is committed to developing its responsibility policies and best practices on a long-term basis, and it is committed to being a responsible forerunner in its industry. Musti Group is the only pet specialty company to have committed to the United Nations Global Compact. The company is in the process of building a robust responsibility foundation and setting targets and key performance indicators to measure the results.

Conducting operations in a sustainable, responsible and environmentally friendly way requires focused and purposeful actions at all levels of the organization. The basis of all Musti Group's social responsibility is a responsible supply chain, diminishing environmental impact as well as good governance and high ethics. In addition, the company has identified three particular focus areas in order to communicate with its stakeholders: pets and their parents, employees and communities. The most important themes under pets and their parents are high-quality and safe products and services as well as satisfied and loyal customers. Under employees, the most important themes are thriving experts and well-being at work, and under communities, working for the common good and openness for new inventions.

Musti Group sets high standards for quality, safety and expertise, putting the welfare of pets, people and the environment first. The company has already taken concrete actions to this end, having been a member of amfori Business Social Compliance Initiative (amfori BSCI) since 2017. The company also expects its suppliers to commit to Musti's requirements on responsible business practices. Following the Musti Group Supplier Code of Conduct and all national laws and regulations is imperative. The company's dedicated employee team visits the supplier sites in Europe, and also the BSCI also visits the

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

company's supplier sites. Furthermore, the company has a third-party partner in China who visits and audits the sites in Asia. The company has initiated more systematic processes for supply chain sustainability especially in high-risk countries and set the target of having all tier one suppliers in high-risk countries audited.

Musti Group's first Non-Financial Information Report was published on 18 December 2020 and is available at https://www.mustigroup.com/investors/reports-and-presentations/.

Risks and uncertainties

Musti Group's risk profile follows the general risk level of the retail and grocery trade. The industry is not particularly cyclical and not subject to rapid changes. The company regularly monitors changes in the risks and their impact on the business. The company implements risk management continuously and systematically according to a scheduled process. The risk management process ensures that risks related to the Group are identified, estimated and controlled in a proactive way and the management of risks is monitored. The company's risk management includes, among others: identification and review of risks, risk assessment, determining and implementing control measures for the identified risks, and monitoring and reporting of risks.

Musti Group's risk management and risks related to the company's operations are described in more detail in the Board of Directors' Report and Annual Financial Statements published on 18 December 2020 which is available at https://www.mustigroup.com/investors/reports-and-presentations/.

Seasonality

Musti Group's business is characterised by a generally limited seasonality effect, with the high share of recurring food and stable products of net sales translating into low seasonality within years. However, there are certain intra-year fluctuations that affect cash flows, sales and profitability, which are made evident by Musti Group's financial year being from 1 October to 30 September. Usually, the period between July to December has higher sales and profitability margins compared to January to June, driven by higher sales of accessories and other seasonal products.

The volumes and timing of Musti Group's sales may somewhat vary somewhat due to weather conditions, with sales of pet clothing being primarily impacted. Cold winters and rainy weather generally result in higher sales of coats and shoes for pets.

Significant events after the reporting period

There were no significant events after the reporting period.

Financial calendar

Musti Group's Financial Statements release for October 2020–September 2021 will be published on 16 November 2021.

Webcast for analysts and media

A live webcast for analysts and media will be arranged on 10 August 2021 at 14:00 EEST. The event will be held in English. The report will be presented by CEO David Rönnberg and CFO Robert Berglund. The webcast can be followed at https://mustigroup.videosync.fi/2021-q3-results.

A recording of the webcast will be available later at the company's website at www.mustigroup.com/investors/reports-and-presentations/.

You can participate in the telephone conference by calling:

Finland: +358 981710310
Sweden: +46 856642651
United Kingdom: +44 3333000804
United States: +1 6319131422

The participants will be asked to provide the following PIN code: 88224383#

Helsinki, 10 August 2021

Board of Directors

The information in this Interim Report is unaudited.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Further information:

David Rönnberg, CEO, tel. +46 70 896 6552
Robert Berglund, CFO, tel. +358 50 534 8657
Essi Nikitin, Head of IR and Communications, tel +358 50 581 1455

Distribution:

Nasdaq Helsinki
Main media
www.mustigroup.com

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Condensed financial information

Condensed consolidated statement of income

EUR thousand	4–6/2021	4–6/2020	10/2020-6/2021	10/2019-6/2020	10/2019–9/2020
Net sales	82,651	68,767	249,388	207,494	284,397
Other operating income	553	543	1,517	936	1,283
Share of profit of a joint venture	-20	48	-20	48	117
Materials and services	-45,095	-39,464	-135,593	-116,634	-159,717
Employee benefit expenses	-15,204	-11,633	-45,412	-36,359	-48,364
Other operating expenses	-10,347	-7,820	-29,175	-25,986	-33,924
Depreciation, amortisation and impairment	-7,256	-6,234	-20,926	-17,760	-24,238
Operating profit	5,281	4,206	19,779	11,739	19,554
Financial income and expenses, net	-356	1,826	-503	-4,460	-5,894
Profit before taxes	4,925	6,032	19,276	7,279	13,661
Income tax expense	-792	-1,163	-3,571	-1,426	-1,907
Profit/loss for the period	4,133	4,868	15,705	5,853	11,754
Attributable to:
Owners of the parent	4,131	4,852	15,692	5,822	11,712
Non-controlling interest	2	16	13	30	42
Earnings per share (EUR) for profit attributable to owners of the parent
Basic EPS (EUR)	0.12	0.14	0.47	0.19	0.37
Diluted EPS (EUR)	0.12	0.14	0.47	0.19	0.37

Consolidated statement of comprehensive income

EUR thousand	4–6/2021	4–6/2020	10/2020-6/2021	10/2019-6/2020	10/2019–9/2020
Profit/loss for the period	4,133	4,868	15,705	5,853	11,754
Other comprehensive income
Items that may be reclassified to profit or loss in subsequent periods:
Translation differences	387	533	1,349	58	-76
Other comprehensive income, net of tax	387	533	1,349	58	-76
Total comprehensive income	4,519	5,401	17,054	5,911	11,678
Attributable to:
Owners of the parent	4,518	5,385	17,041	5,881	11,635
Non-controlling interest	2	16	13	30	42

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Consolidated statement of financial position

EUR thousand	30 Jun 2021	30 Jun 2020	30 Sep 2020
ASSETS
Non-current assets
Goodwill	153,703	145,618	145,434
Other intangible assets	19,385	21,220	20,480
Right-of-use assets	71,531	61,472	62,014
Property, plant and equipment	14,855	11,258	11,304
Investments in joint ventures	940	891	960
Deferred tax assets	7,978	7,067	5,914
Other non-current receivables	122	378	345
Total non-current assets	268,513	247,902	246,452

Current assets
Inventories	40,241	37,631	36,376
Trade and other receivables	7,599	6,449	6,466
Loan receivables	0	11	15
Derivative financial instruments	372	12	0
Income tax receivables	400	4,160	1,378
Cash and cash equivalents	13,508	7,758	21,606
Total current assets	62,120	56,020	65,840

TOTAL ASSETS	330,633	303,922	312,292

EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital	11,002	11,002	11,002
Other reserves	154,691	167,412	167,412
Own shares	-4,948	0	0
Translation differences	1,189	-25	-159
Retained earnings	-8,790	-31,330	-25,132
Total equity attributable to owners of the parent	153,144	147,059	153,122
Equity attributable to non-controlling interest	101	146	157
Total equity	153,245	147,205	153,279

Non-current liabilities
Loans from credit institutions	49,849	49,758	49,781
Lease liability	57,827	50,316	50,538
Deferred tax liabilities	2,219	2,116	2,168
Other liabilities	28	0	0
Total non-current liabilities	109,923	102,190	102,486

Current liabilities
Lease liability	18,418	15,611	15,957
Trade and other payables	43,076	34,670	40,264
Derivative financial instruments	564	149	53
Income tax liabilities	5,373	4,076	233
Provisions	34	21	20
Total current liabilities	67,465	54,527	56,527

Total liabilities	177,388	156,717	159,013

TOTAL EQUITY AND LIABILITIES	330,633	303,922	312,292

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Consolidated statement of changes in equity

| EUR thousand
Attributable to owners of the parent | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Share capital | Other reserves | Own shares | Translation differences | Retained earnings | Total | Non-controlling interest | Total equity |
| Equity at 1 Oct 2020 | 11,002 | 167,412 | 0 | -159 | -25,132 | 153,122 | 157 | 153,279 |
| Profit/loss for the period | | | | | 15,692 | 15,692 | 13 | 15,705 |
| Translation differences | | | | 1,349 | | 1,349 | 5 | 1,353 |
| Total comprehensive income | 0 | 0 | 0 | 1,349 | 15,692 | 17,041 | 17 | 17,058 |
| Capital returns | | -12,720 | | | | -12,720 | | -12,720 |
| Dividends | | | | | | | -74 | -74 |
| Acquisition of own shares | | | -4,948 | | | -4,948 | | -4,948 |
| Share-based incentive plan | | | | | 650 | 650 | | 650 |
| Equity at 30 Jun 2021 | 11,002 | 154,691 | -4,948 | 1,189 | -8,790 | 153,145 | 101 | 153,245 |
| EUR thousand
Attributable to owners of the parent | | | | | | | | |
| | Share capital | Other reserves | Own shares | Translation differences | Retained earnings | Total | Non-controlling interest | Total equity |
| Equity at 1 Oct 2019 | 11,002 | 122,412 | 0 | -83 | -35,012 | 98,319 | 101 | 98,420 |
| Other changes | | | | | -12 | -12 | 12 | 0 |
| Profit/loss for the period | | | | | 5,822 | 5,822 | 30 | 5,853 |
| Translation differences | | | | 58 | | 58 | 2 | 60 |
| Total comprehensive income | 0 | 0 | 0 | 58 | 5,822 | 5,881 | 30 | 5,911 |
| Share issue | | 45,000 | | | | 45,000 | | 45,000 |
| Expenses related to the share issue | | | | | -2,275 | -2,275 | | -2,275 |
| Discount related to the personnel | | | | | 147 | 147 | | 147 |
| Equity at 30 Jun 2020 | 11,002 | 167,412 | 0 | -25 | -31,329 | 147,059 | 146 | 147,205 |

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Consolidated statement of cash flows

EUR thousand	4-6/2021	4-6/2020	10/2020-8/2021	10/2019-6/2020	30 Sep 2020
Cash flows from operating activities
Profit before taxes	4,925	6,032	19,276	7,279	13,661
Adjustments
Depreciation, amortisation and impairment	7,256	6,234	20,926	17,760	24,238
Financial income and expenses, net	356	-1,826	503	4,460	5,894
Other adjustments	202	-305	210	-74	-300
Cash flows before changes in working capital	12,739	10,135	40,915	29,245	43,493
Change in working capital
Increase (-) / decrease (+) in trade and other receivables	-425	-113	-1,080	-640	-693
Increase (-) / decrease (+) in inventories	1,763	-3,282	-3,344	-5,218	-3,659
Increase (+) / decrease (-) in trade and other payables	-3,910	-4,042	2,631	-1,654	3,486
Cash flows from operating activities before financial items and taxes	10,167	2,698	39,122	21,913	42,627
Income taxes paid	-114	-542	820	-422	-762
Net cash flow from operating activities	10,053	2,156	39,942	21,491	41,864
Cash flows from investing activities
Investments in tangible and intangible assets	-3,488	-2,171	-9,690	-7,039	-8,914
Acquisition of subsidiaries and business acquisitions, net of cash acquired	-3,873	-1,096	-6,304	-1,274	-1,361
Investments in joint ventures	0	0	0	0	-600
Disposal of subsidiaries	91	0	91	0	0
Decrease (+) / increase (-) in non-current receivables	8	-706	230	-706	-97
Decrease (+) / increase (-) in loan receivables	0	0	10	0	0
Net cash flow from investing activities	-7,262	-3,973	-15,664	-9,020	-10,972
Cash flows from financing activities
Proceeds from share issues	0	0	0	45,000	45,000
Capital returns paid	0	0	-12,720	0	0
Dividends paid	0	0	-75	0	0
Costs from share issue recognised in equity	0	0	0	-2,696	-2,844
Acquisition of own shares	-1,902	0	-4,948	0	0
Proceeds from non-current loans	0	0	0	50,000	50,000
Repayments of non-current loans	0	0	0	-84,630	-84,879
Repayments of current loans	0	-400	0	-5,280	-5,031
Repayments of lease liabilities	-4,441	-3,675	-12,615	-10,962	-14,819
Interest and other financial expenses paid	-1,148	-906	-3,918	-4,981	-5,788
Interest and other finance income received *)	604	92	1,901	207	445
Net cash flow from financing activities	-6,887	-4,889	-32,376	-13,342	-17,915
Net change in cash and cash equivalents	-4,096	-6,706	-8,098	-871	12,977
Cash and cash equivalents at start of period	17,604	14,463	21,606	8,629	8,629
Cash and cash equivalents at end of period	13,508	7,758	13,508	7,758	21,606

*) Interest and other finance income received has been reclassified from net cash flow operating activities to net cash flow from financing activities.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Basis of preparation and accounting policies

The Group's consolidated interim financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as implemented within the EU.

The interim report of 1 October 2020 – 30 June 2021 has been prepared in accordance with the IAS 34 Interim Financial Reporting standard and the accounting principles applied in the interim report are the same as in the financial statement of 2020.

The figures of the interim report have not been audited.

The Group's consolidated financial statements are prepared in euros, which is the company's operating currency and the company's and the Group's reporting currency. The interim report is presented in thousand euros unless otherwise stated.

Critical accounting estimates and judgments

An IFRS-compliant interim report requires the Group's management to exercise judgment and make estimates and assumptions that affect the reported amounts of assets and liabilities and other information such as the amounts of income and expense. Although these estimates are based on the management's best knowledge at the time, it is possible that actual results differ from the estimates used in the interim report.

There have not been any major changes regarding the uncertainty requiring the Group's management to exercise judgment and make estimates and assumptions compared to the financial statement of 2020.

Key accounting considerations related to COVID-19

During October 2020–June 2021 Musti Group received but didn't apply for any financial assistance under governmental scheme. However, the amount of the assistance was not material from a Group perspective. The group also negotiated some rent reductions during the financial period for which the group has not applied the IFRS 16 Covid-19 amendment. The Group's management has assessed COVID-19 impacts by reviewing the carrying values of the balance sheet items, the review did not indicate need for asset impairments.

Events after the reporting period

In a press release 30 June 2021 Musti Group announced that its subsidiary Musti ja Mirri Oy has offered to acquire the businesses of all 16 stores operated under franchising agreements in Finland through an asset purchase agreement. Negotiations with franchisees were successfully concluded in June 2021, and the 16 stores will become directly operated part of Musti Group during Q4 2021. After the transactions are finished, all stores in Finland are directly operated. The total purchase price will amount to approx. EUR 2 million.

On 5 July 2021, Musti Group acquired the shares of a legal entity that operates a pet store in Norway. The acquisition does not significantly impact sales, profitability or the financial position of Musti Group.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Segments

EUR thousand	Finland	Sweden	Norway	Group functions	Group
4/2021–6/2021
Net sales *	36,245	36,372	10,034	0	82,651
% split of net sales between segments	44%	44%	12%	0%	100%
EBITDA	9,985	6,750	2,476	-6,673	12,537
Adjustments	0	34	0	309	343
Adjusted EBITDA	9,985	6,784	2,476	-6,364	12,880
Depreciation and impairment of right-of-use assets and tangible assets	-2,089	-2,272	-837	-406	-5,604
EBITA	7,896	4,477	1,639	-7,079	6,933
Adjustments	0	34	0	309	343
Adjusted EBITA	7,896	4,511	1,639	-6,770	7,276
Amortisation and impairment of intangible assets					-1,652
Operating profit					5,281
Financial income and expenses, net					-356
Profit before taxes					4,925
Income tax expense					-792
Profit/loss for the period					4,133
* Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
EUR thousand	Finland	Sweden	Norway	Group functions	Group
4/2020–6/2020
Net sales *	32,032	30,128	6,607	0	68,767
% split of net sales between segments	47%	44%	10%	0%	100%
EBITDA	9,230	4,956	1,637	-5,382	10,440
Adjustments	83	77	17	535	712
Adjusted EBITDA	9,313	5,033	1,654	-4,847	11,152
Depreciation and impairment of right-of-use assets and tangible assets	-1,976	-1,860	-616	-277	-4,728
EBITA	7,254	3,096	1,020	-5,659	5,712
Adjustments	83	77	17	535	712
Adjusted EBITA	7,337	3,173	1,038	-5,124	6,424
Amortisation and impairment of intangible assets					-1,506
Operating profit					4,206
Financial income and expenses, net					1,826
Profit before taxes					6,032
Income tax expense					-1,163
Profit/loss for the period					4,868

Net sales include sales of products and services to external customers. There are no internal net sales between the segments.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

EUR thousand	Finland	Sweden	Norway	Group functions	Group
10/2020–6/2021
Net sales *	112,439	107,670	29,279	0	249,388
% split of net sales between segments	45%	43%	12%	0%	100%
EBITDA	32,464	20,346	7,316	-19,420	40,705
Adjustments	0	389	26	534	950
Adjusted EBITDA	32,465	20,735	7,342	-18,887	41,655
Depreciation and impairment of right-of-use assets and tangible assets	-6,142	-6,183	-2,326	-1,419	-16,069
EBITA	26,322	14,162	4,990	-20,839	24,636
Adjustments	0	389	26	534	950
Adjusted EBITA	26,323	14,552	5,016	-20,305	25,585
Amortisation and impairment of intangible assets					-4,856
Operating profit					19,779
Financial income and expenses, net					-503
Profit before taxes					19,276
Income tax expense					-3,571
Profit/loss for the period					15,705
* Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
EUR thousand	Finland	Sweden	Norway	Group functions	Group
10/2019–6/2020
Net sales *	99,814	89,799	17,882	0	207,494
% split of net sales between segments	48%	43%	9%	0%	100%
EBITDA	29,192	14,758	3,502	-17,953	29,499
Adjustments	85	76	15	3,396	3,572
Adjusted EBITDA	29,277	14,834	3,518	-14,557	33,071
Depreciation and impairment of right-of-use assets and tangible assets	-5,671	-4,893	-1,741	-1,026	-13,331
EBITA	23,521	9,865	1,761	-18,979	16,168
Adjustments	85	76	15	3,396	3,572
Adjusted EBITA	23,606	9,941	1,777	-15,584	19,740
Amortisation and impairment of intangible assets					-4,429
Operating profit					11,739
Financial income and expenses, net					-4,460
Profit before taxes					7,279
Income tax expense					-1,426
Profit/loss for the period					5,853
* Net sales include sales of products and services to external customers. There are no internal net sales between the segments.

Musti GROUP

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

EUR thousand	Finland	Sweden	Norway	Group functions	Group
10/2019–9/2020
Net sales *	135,795	123,244	25,358	0	284,397
% split of net sales between segments	48%	43%	9%	0%	100%
EBITDA	40,472	21,181	5,301	-23,161	43,792
Adjustments	162	419	29	3,656	4,266
Adjusted EBITDA	40,633	21,600	5,329	-19,505	48,058
Depreciation and impairment of right-of-use assets and tangible assets	-7,677	-6,716	-2,403	-1,448	-18,244
EBITA	32,795	14,465	2,898	-24,610	25,548
Adjustments	162	419	29	3,656	4,266
Adjusted EBITA	32,957	14,884	2,927	-20,953	29,814
Amortisation and impairment of intangible assets					-5,994
Operating profit					19,554
Financial income and expenses, net					-5,894
Profit before taxes					13,661
Income tax expense					-1,907
Profit/loss for the period					11,754
* Net sales include sales of products and services to external customers. There are no internal net sales between the segments.

Business combinations and changes in Group composition

Musti Group's subsidiary Arken Zoo Nord AB acquired the entire capital stock of Calida AB and Lomiwa AB, which operate two franchise stores in Sweden, on 1 January 2021. The acquisitions complements Musti Group's existing Arken Zoo chain in Sweden. The final consideration paid was EUR 1.2 million in cash, and the amount of cash and cash equivalents obtained was EUR 0.2 million. According to the preliminary acquisition cost calculation the assets acquired amounted to EUR 0.4 million, liabilities amounted to EUR 0.3 million and goodwill amounted to EUR 1.1 million.

The acquisitions of Calida AB and Lomiwa AB increased the Group's net sales by EUR 0.9 million and increased operating profit by EUR 0.1 million for the period 1 January 2021 – 30 June 2021. The effect on the Group's net sales would have been approximately EUR 1.4 million and on the operating profit EUR 0.2 million for the period ended 30 June 2021 if the acquisitions had been consolidated from the beginning of the financial year.

During the period 1 October 2020 – 30 June 2021 Musti Group acquired pet stores, one in Finland and seven in Sweden as business acquisitions. The total purchase price of the stores was approximately EUR 5.3 million, of which EUR 3.7 million was for business acquisitions during Q3 2021, and the resulting goodwill EUR 5.1 million. Goodwill is based on synergies from the acquisitions. The resulting goodwill is deductible in taxation. The store acquisitions increased the Group's net sales by EUR 2.4 million and increased operating profit by EUR 0.5 million for the period 1 October 2020 – 30 June 2021. The effect on the Group's net sales would have been approximately EUR 5.5 million and on the operating profit EUR 1.8 million for the period ended 30 June 2021 if the acquisitions had been consolidated from the beginning of the financial year.

On 30 April 2021 Musti Group's Swedish subsidiaries Calida AB, Lomiwa AB and VetZoo AB were merged into Musti Group's Swedish subsidiary Arken Zoo Nord AB.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Business disposals

In April 2021, Musti Group sold its ownership in the Swedish subsidiaries Anivet AB, Carnia AB, Tasso i Malmö AB and ZooZoocom AB. The sale did not have a significant impact on Musti Group's result in Q3 2021.

Personnel on average and at the end of the reporting period

Personnel	30 Jun 2021	30 Jun 2020	30 Sep 2020
Personnel on average	1,256	1,140	1,145
Personnel at the end of period	1,318	1,171	1,162

Goodwill, intangible assets and property, plant and equipment

EUR thousand	30 Jun 2021	30 Jun 2020	30 Sep 2020
Acquisition cost at beginning of reporting period	177,218	176,272	176,272
Amortisation and depreciation	-8,033	-6,822	-9,323
Additions	16,336	8,306	10,348
Disposals and closing of stores	-124	-172	-183
Exchange differences	2,546	512	105
Acquisition cost at end of reporting period	187,943	178,095	177,218

Musti GROUP

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

Leases

Right-of-use assets

EUR thousand	Buildings and structures	Machinery and equipment	Total
30 Jun 2021
Net book value at 1 Oct 2020	61,516	498	62,014
New contracts	8,094	192	8,286
Contracts terminated prematurely	-1,275	-4	-1,279
Revaluations and modifications	13,229	15	13,244
Exchange rate differences	2,117	21	2,138
Depreciation	-12,690	-183	-12,872
Net book value at 30 Jun 2021	70,992	539	71,531
30 Jun 2020
Net book value at 1 Oct 2019	46,816	481	47,296
New contracts	10,682	144	10,826
Contracts terminated prematurely	-973	-18	-991
Revaluations and modifications	15,407	9	15,415
Exchange rate differences	-146	8	-138
Depreciation	-10,809	-129	-10,938
Net book value at 30 Jun 2020	60,976	495	61,472
30 Sep 2020
Net book value at 1 Oct 2019	46,816	481	47,296
New contracts	13,329	194	13,522
Contracts terminated prematurely	-1,601	-25	-1,625
Revaluations and modifications	18,245	16	18,260
Exchange rate differences	-529	5	-524
Depreciation	-14,743	-173	-14,915
Net book value at 30 Sep 2020	61,516	498	62,014

Lease liability

EUR thousand	30 Jun 2021	30 Jun 2020	30 Sep 2020
Lease liability at beginning of reporting period	66,494	51,982	51,982
Net increases	22,459	24,888	29,354
Rent expenses	-14,412	-12,763	-17,237
Interest expense	1,704	1,820	2,395
Lease liability at end of reporting period	76,245	65,927	66,494
Non-current lease liability	57,827	50,316	50,538
Current lease liability	18,418	15,611	15,957
Total	76,245	65,927	66,494

Lease contracts in the income statement

EUR thousand	10/2020-6/2021	10/2019-6/2020	10/2019-9/2020
Expenses from short-term rental agreements, leasing agreements with minor value and variable rental costs, that are not included in the lease liability	-1,116	-1,146	-1,697
Depreciation of right-of-use assets	-12,872	-10,938	-14,915
Interest expenses from lease liability	-1,704	-1,820	-2,395
Total	-15,692	-13,904	-19,008

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Financial assets and liabilities and fair value hierarchy

Financial assets

EUR thousand	Financial assets at fair value through profit and loss	Financial assets at amortised cost	Book value	Fair value	Fair value hierarchy
30 Jun 2021
Non-current assets
Other non-current assets		122	122	122	Level 2
Total		122	122	122
Current assets
Trade and other receivables *)		3,661	3,661	3,661	Level 2
Loan receivables		0	0	0	Level 2
Derivative financial instruments	372		372	372	Level 2
Cash and cash equivalents		13,508	13,508	13,508	Level 2
Total	372	17,169	17,541	17,541
Financial assets, total	372	17,290	17,662	17,662
30 Jun 2020
Non-current assets
Other non-current assets		378	378	378	Level 2
Total		378	378	378
Current assets
Trade and other receivables *)		3,412	3,412	3,412	Level 2
Loan receivables		11	11	11	Level 2
Derivative financial instruments	12		12	12	Level 2
Cash and cash equivalents		7,758	7,758	7,758	Level 2
Total	12	11,181	11,193	11,193
Financial assets, total	12	11,559	11,571	11,571
30 Sep 2020
Non-current assets
Other non-current assets		345	345	345	Level 2
Total		345	345	345
Current assets
Trade and other receivables *)		3,483	3,483	3,483	Level 2
Loan receivables		15	15	15	Level 2
Derivative financial instruments	0		0	0	Level 2
Cash and cash equivalents		21,606	21,606	21,606	Level 2
Total	0	25,103	25,103	25,103
Financial assets, total	0	25,449	25,449	25,499

Musti

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

Financial liabilities

EUR thousand	Financial liabilities at fair value through profit and loss	Financial liabilities at amortised cost	Book value	Fair value	Fair value hierarchy
30 Jun 2021
Non-current liabilities
Loans from credit institutions		49,849	49,849	49,849	Level 2
Lease liability		57,827	57,827	57,827	Level 2
Total		107,676	107,676	107,676
Current liabilities
Loans from credit institutions		0	0	0	Level 2
Lease liability		18,418	18,418	18,418	Level 2
Trade and other payables *)		21,794	21,794	21,794	Level 2
Derivative financial instruments	564		564	564	Level 2
Total	564	40,213	40,777	40,777
Financial liabilities total	564	147,889	148,453	148,453
30 Jun 2020
Non-current liabilities
Loans from credit institutions		49,758	49,758	49,758	Level 2
Lease liability		50,316	50,316	50,316	Level 2
Total		100,074	100,074	100,074
Current liabilities
Loans from credit institutions		0	0	0	Level 2
Lease liability		15,611	15,611	15,611	Level 2
Trade and other payables *)		14,666	14,666	14,666	Level 2
Derivative financial instruments	149		149	149	Level 2
Total	149	30,278	30,427	30,427
Financial liabilities total	149	130,351	130,500	130,500
30 Sep 2020
Non-current liabilities
Loans from credit institutions		49,781	49,781	49,781	Level 2
Lease liability		50,538	50,538	50,538	Level 2
Total		100,318	100,318	100,318
Current liabilities
Loans from credit institutions		0	0	0	Level 2
Lease liability		15,957	15,957	15,957	Level 2
Trade and other payables *)		20,730	20,730	20,730	Level 2
Derivative financial instruments	53		53	53	Level 2
Total	53	36,687	36,740	36,740
Financial liabilities total	53	137,005	137,058	137,058

*) Other receivables and other payables includes only items classified as financial assets or liabilities.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Level 1: Quoted unadjusted prices at the balance sheet date in active markets. The market prices are readily and regularly available from an exchange, dealer, broker, market information service system, pricing service or regulatory agency. The quoted market price used for financial assets is the current bid price. Level 1 financial instruments include investments in funds classified as financial instruments at fair value through profit and loss. Musti Group does not have Level 1 financial instruments.

Level 2: The fair value of financial instruments in Level 2 is determined using valuation techniques. These techniques utilize observable market data readily and regularly available from an exchange, dealer, broker, market information service system, pricing service or regulatory agency. Musti Group has classified derivatives at fair value according to the Level 2.

Level 3: A financial instrument is categorized into Level 3, if the calculation of the fair value cannot be based on observable market data. Musti Group has no such financial instruments.

During the reporting period there has not been any transfers between the levels of the fair value hierarchy.

Derivative financial instruments

EUR thousand	Nominal value	Receivables at fair value	Payables at fair value	Net fair value
30 Jun 2021
Forward exchange contracts	19,633	372	-564	-192
Total	19,633	372	-564	-192
30 Jun 2020
Forward exchange contracts	7,064	12	-149	-137
Total	7,064	12	-149	-137
30 Sep 2020
Forward exchange contracts	889	0	-53	-53
Total	889	0	-53	-53

Group's commitments

EUR thousand	30 Jun 2021	30 Jun 2020	30 Sep 2020
Pledges given on behalf of Group companies and joint ventures
Collateral relating to rental payments	0	143	0
Guarantees relating to rental payments	4,398	4,094	3,759
Other commitments	150	411	388
Total	4,549	4,648	4,147
Other commitments
Other guarantees	3,000	0	2,000
Lease liabilities for leases not recognised in the balance sheet	5,955	4,070	2,009
Total	8,955	4,070	4,009

Lease liabilities not recognised in the balance sheet includes the nominal amount of low-value and short-term lease liabilities and the liability for agreements that will enter into force in the future.

Contingent liabilities

Musti is currently subject to a tax audit of Musti Group Oyj, Musti Group Finland Oy and Musti Group Nordic Oy regarding financial years 2018-2020. Musti Group has in June 2021 received a tax audit report from the Finnish tax authorities. The tax audit report included subsequent taxes and tax increases amounting to a total of EUR 0.9 million. The Group disagrees with the interpretation made in the tax audit. If the companies are to be reassessed in accordance with the interpretations set out in the tax audit reports, the companies will file a claim for adjustment to the Finnish Tax Administration's Assessment Adjustment Board. The Group has not recognized a liability for deferred taxes and tax increases.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Related party transactions

Parties are considered to be related if one party has the ability to control or exercise significant influence on the other party, or if the parties exercise joint control in making financial and operating decisions. Musti Group's related parties include its subsidiaries, joint venture, Board of Directors and the members of the management team, including the CEO, as well as their family members. Until the IPO in February 2020 the related parties also included its owners EQT Mid Market Fund, Vaaka Partners, Braganza AB and Ludv. G Braathens Rederi AS as well as Musti Group Finland Oy's (previously named Musti Group Oy's) (operating) Board of Directors. After the IPO EQT Mid Market Fund's indirect holding was 24.1% and on 13 August 2020 the indirect holding decreased to 5.6%. EQT Mid Market Fund relinquished its ownership on 16 November 2020.

Other related party transactions

EUR thousand	30 Jun 2021	30 Jun 2020	30 Sep 2020
Purchases of goods and services	2,139	2,143	2,737
Receivables	76	688	76
Payables	57	150	145
Guarantees given on behalf of joint ventures	3,000	0	2,000

Related party transactions are executed with the arms-length principle, and their terms and conditions correspond to transactions carried out with independent parties. No loans have been granted to the management, and no other transactions have been conducted with the management.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Financial ratios and alternative performance measures

EUR million or as indicated	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	10/2019-9/2020
Net sales	82.7	68.8	20.2	249.4	207.5	20.2	284.4
Net sales growth, %	20.2%	16.6%		20.2%	13.9%		15.3%
LFL sales growth, %	11.6%	11.5%		12.1%	11.2%		11.5%
LFL store sales growth, %	10.7%	4.3%		9.1%	7.1%		7.3%
Online share of net sales, %	24.1%	25.0%		23.4%	22.7%		22.5%
Gross margin, %	45.4%	42.6%		45.6%	43.8%		43.8%
EBITDA	12.5	10.4	20.1	40.7	29.5	38.0	43.8
EBITDA margin	15.2%	15.2%		16.3%	14.2%		15.4%
Adjusted EBITDA	12.9	11.2	15.5	41.7	33.1	26.0	48.1
Adjusted EBITDA margin, %	15.6%	16.2%		16.7%	15.9%		16.9%
EBITA	6.9	5.7	21.4	24.6	16.2	52.4	25.5
EBITA margin	8.4%	8.3%		9.9%	7.8%		9.0%
Adjusted EBITA	7.3	6.4	13.3	25.6	19.7	29.6	29.8
Adjusted EBITA margin, %	8.8%	9.3%		10.3%	9.5%		10.5%
Operating profit	5.3	4.2	25.6	19.8	11.7	68.5	19.6
Operating profit margin, %	6.4%	6.1%		7.9%	5.7%		6.9%
Profit/loss for the period	4.1	4.9	-15.1	15.7	5.9	168.3	11.8
Earnings per share, basic, EUR	0.12	0.14		0.47	0.19		0.37
Earnings per share, diluted, EUR	0.12	0.14		0.47	0.19		0.37
Cash flows from operating activities	10.1	2.2	366.2	39.9	21.5	85.9	41.9
Investments in tangible and intangible assets	3.5	2.2	60.7	9.7	7.0	37.7	8.9
Net debt	112.8	108.1	4.4	112.8	108.1	4.4	94.7
Gearing, %	73.6%	73.4%		73.6%	73.4%		61.8%
Net debt / LTM Adjusted EBITDA	2.0	2.4	-18.6	2.0	2.4	-18.6	2.0
Equity ratio, %	46.4%	48.5%		46.4%	48.5%		49.1%
Number of loyal customers, thousands	1,257	1,107	13.5	1,257	1,107	13.5	1,151
Number of stores at end of period	308	290	6.0	308	290	6.0	293
of which directly operated	257	227	6.2	257	227	6.2	231
Own & Exclusive share, %	49.9%	48.5%		50.9%	50.3%		50.3%

Musti GROUP

Musti Group's October 2020 – June 2021 Interim Report Q3 2021

10 August 2021

EUR million or as indicated	4-6/2021	4-6/2020	Change %	10/2020-6/2021	10/2019-6/2020	Change %	10/2019-9/2020
Finland
Net sales	36.2	32.0	13.2	112.4	99.8	12.6	135.8
Net sales growth, %	13.2%	10.0%		12.6%	10.3%		10.6%
LFL sales growth, %	10.7%	6.2%		11.1%	6.6%		7.4%
EBITDA	10.0	9.2	8.2	32.5	29.2	11.2	40.5
EBITDA margin, %	27.5%	28.8%		28.9%	29.2%		29.8%
Adjusted EBITDA	10.0	9.3	7.2	32.5	29.3	10.9	40.6
Adjusted EBITDA margin, %	27.5%	29.1%		28.9%	29.3%		29.9%
EBITA	7.9	7.3	8.8	26.3	23.5	11.9	32.8
EBITA margin, %	21.8%	22.6%		23.4%	23.6%		24.2%
Adjusted EBITA	7.9	7.3	7.6	26.3	23.6	11.5	33.0
Adjusted EBITA margin, %	21.8%	22.9%		23.4%	23.6%		24.3%
Number of stores at end of period	133	129	3.1	133	129	3.1	129
of which directly operated	117	111	5.4	117	111	5.4	112
Sweden
Net sales	36.4	30.1	20.7	107.7	89.8	19.9	123.2
Net sales growth, %	20.7%	16.8%		19.9%	12.4%		14.7%
LFL sales growth, %	10.2%	13.0%		8.8%	14.1%		13.4%
EBITDA	6.7	5.0	36.2	20.3	14.8	37.9	21.2
EBITDA margin, %	18.6%	16.4%		18.9%	16.4%		17.2%
Adjusted EBITDA	6.8	5.0	34.8	20.7	14.8	39.8	21.6
Adjusted EBITDA margin, %	18.7%	16.7%		19.3%	16.5%		17.5%
EBITA	4.5	3.1	44.6	14.2	9.9	43.6	14.5
EBITA margin, %	12.3%	10.3%		13.2%	11.0%		11.7%
Adjusted EBITA	4.5	3.2	42.2	14.6	9.9	46.4	14.9
Adjusted EBITA margin, %	12.4%	10.5%		13.5%	11.1%		12.1%
Number of stores at end of period	127	123	3.3	127	123	3.3	125
of which directly operated	92	78	17.9	92	78	17.9	80
Norway
Net sales	10.0	6.6	51.9	29.3	17.9	63.7	25.4
Net sales growth, %	51.9%	62.9%		63.7	52.5%		54.6%
LFL sales growth, %	21.0%	44.8%		33.5	32.5%		33.3%
EBITDA	2.5	1.6	51.3	7.3	3.5	108.9	5.3
EBITDA margin, %	24.7%	24.8%		25.0%	19.6%		20.9%
Adjusted EBITDA	2.5	1.7	49.7	7.3	3.5	108.7	5.3
Adjusted EBITDA margin, %	24.7%	25.0%		25.1%	19.7%		21.0%
EBITA	1.6	1.0	60.6	5.0	1.8	183.3	2.9
EBITA margin, %	16.3%	15.4%		17.0%	9.8%		11.4%
Adjusted EBITA	1.6	1.0	58.0	5.0	1.8	182.3	2.9
Adjusted EBITA margin, %	16.3%	15.7%		17.1%	9.9%		11.5%
Number of stores at end of period	48	38	26.3	48	38	26.3	39
of which directly operated	48	38	26.3	48	38	26.3	39

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Calculation of financial ratios and alternative performance measures

Measure	Calculation
Gross profit	Net sales - Materials and services
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	Operating profit + Depreciation, amortisation and impairment
Adjusted earnings before interest, taxes, depreciation and amortisation (Adjusted EBITDA)	Operating profit + Depreciation, amortisation and impairment +Adjustments
Earnings before interest, taxes and amortisation (EBITA)	Operating profit + Amortisation and impairment of intangible assets
Adjusted earnings before interest, taxes and amortisation (Adjusted EBITA)	Operating profit + Amortisation and impairment of intangible assets + Adjustments
Net Debt	Interest bearing liabilities - Loan receivables +/- Derivative financial instruments - Cash and cash equivalents
Gearing, %	Net debt
Equity
Net debt/LTM (last twelve months) Adjusted EBITDA	Net Debt
LTM adjusted EBITDA
Equity ratio, %	Total equity
Total assets - Advances received
LFL (Like-for-like) sales growth, %	Sales of online channels and stores that have been open more than 13 months
Sales from corresponding online channels and stores in the same time period in the previous reporting period
Own & Exclusive share, %	Sales of own and exclusive product sales
Product sales in own channels
Online share, %	Online sales
Net sales
Earnings per share, basic	Profit/loss for the period – Non-controlling interests
Average number of shares
Earnings per share, diluted	Profit/loss for the period – Non-controlling interests
Average diluted number of shares

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Reconciliation of key performance indicators

EUR million or as indicated	4-6/2021	4-6/2020	10/2020-6/2021	10/2019-6/2020	10/2019-9/2020
Gross profit
Net sales	82.7	68.8	249.4	207.5	284.4
Material and services	-45.1	-39.5	-135.6	-116.6	-159.7
Gross profit	37.6	29.3	113.8	90.9	124.7
Gross margin, %	45.4%	42.6%	45.6%	43.8%	43.8%
Earnings before interest, taxes, depreciation and amortisation (EBITDA)
Operating profit	5.3	4.2	19.8	11.7	19.6
Depreciation, amortisation and impairment	7.3	6.2	20.9	17.8	24.2
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	12.5	10.4	40.7	29.5	43.8
EBITDA margin, %	15.2%	15.2%	16.3%	14.2%	15.4%
Adjusted earnings before interest, taxes, depreciation and amortisation (Adjusted EBITDA)
Operating profit	5.3	4.2	19.8	11.7	19.6
Depreciation, amortisation and impairment	7.3	6.2	20.9	17.8	24.2
Adjustments	0.3	0.7	0.9	3.6	4.3
Adjusted earnings before interest, taxes, depreciation and amortisation (Adjusted EBITDA)	12.9	11.2	41.7	33.1	48.1
Adjusted EBITDA margin, %	15.6%	16.2%	16.7%	15.9%	16.9%
Adjustments (EBITDA)
Restructuring related expenses	0.0	0.0	0.0	0.0	0.0
Acquisition/IPO related expenses	0.0	0.5	0.0	3.4	3.4
Other items affecting comparability	0.3	0.2	0.9	0.2	0.9
Adjustments (EBITDA)	0.3	0.7	0.9	3.6	4.3
Earnings before interest, taxes and amortisation (EBITA)
Operating profit	5.3	4.2	19.8	11.7	19.6
Amortisation and impairment of intangible assets	1.7	1.5	4.9	4.4	6.0
Earnings before interest, taxes and amortisation (EBITA)	6.9	5.7	24.6	16.2	25.5
EBITA margin, %	8.4%	8.3%	9.9%	7.8%	9.0%
Adjusted earnings before interest, taxes and amortisation (Adjusted EBITA)
Operating profit	5.3	4.2	19.8	11.7	19.6
Amortisation and impairment of intangible assets	1.7	1.5	4.9	4.4	6.0
Adjustments total	0.3	0.7	0.9	3.6	4.3
Adjusted earnings before interest, taxes and amortisation (Adjusted EBITA)	7.3	6.4	25.6	19.7	29.8
Adjusted EBITA margin, %	8.8%	9.3%	10.3%	9.5%	10.5%
Adjustments (Operating profit)

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Restructuring related expenses	0.0	0.0	0.0	0.0	0.0
Acquisition/IPO related expenses	0.0	0.5	0.0	3.4	3.4
Other items affecting comparability	0.3	0.2	0.9	0.2	0.9
Adjustments (Operating profit)	0.3	0.7	0.9	3.6	4.3
Net debt
Interest bearing liabilities	126.1	115.7	126.1	115.7	116.3
Loan receivables	0.0	0.0	0.0	0.0	0.0
Derivative financial instruments	0.2	0.1	0.2	0.1	0.1
Cash and cash equivalents	13.5	7.8	13.5	7.8	21.6
Net debt	112.8	108.1	112.8	108.1	94.7
Gearing, %
Net Debt	112.8	108.1	112.8	108.1	94.7
Equity	153.2	147.2	153.2	147.2	153.3
Gearing, %	73.6%	73.4%	73.6%	73.4%	61.8%
Net debt/LTM Adjusted EBITDA
Net debt	112.8	108.1	112.8	108.1	94.7
LTM adjusted EBITDA	56.6	44.2	56.6	44.2	48.1
Net debt/LTM Adjusted EBITDA	2.0	2.4	2.0	2.4	2.0
Equity ratio, %
Total equity	153.2	147.2	153.2	147.2	153.3
Total assets	330.6	303.9	330.6	303.9	312.3
Advances received	0.4	0.3	0.4	0.3	0.2
Equity ratio, %	46.4%	48.5%	46.4%	48.5%	49.1%
LFL sales growth, %
Net sales	82.7	68.8	249.4	207.5	284.4
Net sales growth, %	20.2%	16.6%	20.2%	13.9%	15.3%
Other growth, %	8.6%	5.1%	8.1%	2.7%	3.8%
LFL sales growth, %	11.6%	11.5%	12.1%	11.2%	11.5%
LFL store sales growth, %
Store sales	59.9	48.4	181.5	150.2	206.6
Store sales total growth, %	23.8%	12.0%	20.9%	11.8%	13.2%
Other growth, %	13.1%	7.7%	11.8%	4.6%	5.9%
LFL store sales growth, %	10.7%	4.3%	9.1%	7.1%	7.3%
Net sales
Store sales	59.9	48.4	181.5	150.2	206.6
Online sales	19.9	17.2	58.3	47.1	64.1
Other sales	2.9	3.2	9.6	10.2	13.8
Net sales	82.7	68.8	249.4	207.5	284.4
Online share, %
Net sales	82.7	68.8	249.4	207.5	284.4
Online sales	19.9	17.2	58.3	47.1	64.1
Online share, %	24.1%	25.0%	23.4%	22.7%	22.5%
Earnings per share, basic
Profit/loss for the period	4.1	4.9	15.7	5.9	11.8
Non-controlling interest	0.0	0.0	0.0	0.0	0.0
Average number of shares *)	33.4	33.5	33.4	30.4	31.7
Earnings per share, basic	0.12	0.14	0.47	0.19	0.37

*) Number of shares before share issue of February 2020 was 28.375.781 and after share issue 33.535.453.

Musti Group's October 2020 – June 2021 Interim Report Q3 2021
10 August 2021

Earnings per share, diluted
Profit/loss for the period	4.1	4.9	15.7	5.9	11.8
Non-controlling interest	0.0	0.0	0.0	0.0	0.0
Average number of shares *)	33.6	33.5	33.7	30.4	31.8
Earnings per share. diluted	0.12	0.14	0.47	0.19	0.37
*) Includes shares from Restricted Share Plan (PSP).

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Musti Group Oyj — Interim / Quarterly Report 2021

3276_rns_2021-08-10_b1162aee-fccb-4afa-b7ad-c6e6bc814485.pdf

Interim Report 1 October 2020 – 30 June 2021

Continuing strong growth

April – June 2021

October 2020 – June 2021

Key figures

CEO's comments

Financial targets

Market outlook

Group performance

April-June 2021

October 2020 – June 2021

Result

April – June 2021

October 2020 – June 2021

Financial position and cash flow

Investments

Business segment performance

Finland

April – June 2021

October 2020 – June 2021

Sweden

April – June 2021

October 2020 – June 2021

Norway

Personnel

Changes in Group composition

Changes in Group management

Governance

Annual General Meeting

Shares and shareholders

Share capital

Trading of shares

Own shares

Authorizations of the Board of Directors

Shareholders and flagging notifications

Managers' transactions

Remuneration schemes

Bonus scheme

Long-term incentives

Responsibility

Risks and uncertainties

Seasonality

Significant events after the reporting period

Financial calendar

Webcast for analysts and media

Further information:

Distribution:

Condensed financial information

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Basis of preparation and accounting policies

Critical accounting estimates and judgments

Key accounting considerations related to COVID-19

Events after the reporting period

Business combinations and changes in Group composition

Business disposals

Personnel on average and at the end of the reporting period

Goodwill, intangible assets and property, plant and equipment

Leases

Financial assets and liabilities and fair value hierarchy

Derivative financial instruments

Group's commitments

Contingent liabilities

Related party transactions

Other related party transactions

Financial ratios and alternative performance measures

Calculation of financial ratios and alternative performance measures

Reconciliation of key performance indicators

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Musti Group Oyj Interim / Quarterly Report 2021