New Nordic Healthbrands : Three month report Q1 January – March 2022

NEW NORDIC HEALTHBRANDS AB (PUBL) THREE MONTH REPORT

JANUARY - MARCH 2022

Q1 2022	Q1 2021	FULL YEAR 2021
Net sales, kSEK	123 336	127 831
Change in SEK, percent	-3.5	13.9	14.4
Change in local currencies, %	-8.6	21.1	17.3
Gross profit, kSEK	82 907	85 682	350 048
Gross margin, %	67.2	67.0	68
EBITDA kSEK	2 038	13 415	29 482
EBITDA, %	1.7	10.5	5.7
Operating profit, kSEK	1 759	13 195	28 547
Operating margin, %	1.4	10.3	5.5
Profit for the period, kSEK	980	10 386	21 303
Earnings per share EBITDA, SEK	0.33	2.17	4.76
Earnings per share * after tax, SEK	0.16	1.68	3.44
* There are no dilutive effects

514 845

COMMENTS BY CEO KARL KRISTIAN BERGMAN JENSEN

During the first quarter of the year, we had unexpected challenges and our marketing did not have the ef-fect we had planned. Revenues reached SEK 123 million, which is less than expected. This is a decrease in revenues of 4 percent compared with the same quarter last year.

Sales has decreased in the Nordic region and in the rest of Europe. In North America, sales has increased and in Asia it is status quo. Unfortunately, this has resulted in a profit after tax of only one million SEK.

In many countries in Europe, our main distribution channel is pharmacies. These pharmacies have been busy implementing tests of the fast spreading omicron corona variety during the first months of the year. In countries like France, sales to pharmacies decreased by 20 percent because on this. Inflation also accelerated during the quarter and we experience that our customers have been affected by higher prices for heating and food. Especially when the war in Ukraine started, we could see a drastic decline in sales from retailers to consumers in both physical stores and online stores.

The situation that arose during the quarter has meant that we have now made a temporary adjustment of our operations and product focus. Additionally we currently have several countries that are relatively new to us. For example, we started in Australia just before the pandemic. In Australia and other countries in the same situation, we are taking temporary measures which we are convinced will slow down our establishment for a period. Our adapta-tions to the changing market conditions will focus on profitability and is likely to affect our growth over a period that we hope will not last too long.

The entire New Nordic team is making a fantastic effort and we are ready to adapt. We experience commodity prices and shipping prices rising but we are doing what we can to defend our gross margin. This includes, among other things, that we are looking for alternative suppliers of goods to keep prices down as best we can. We have not had any significant problems with procuring raw materials.

Due to supply disruptions, we have increased our inventories during the past year. In addition, inventories have also increased as our turnover has increased. After the first quarter, we have now started to reduce our inventories again. Towards the end of the year, we will have a more normal stock level.

New Nordic has a strong product range and good innovations ready. We have also strengthened our organiza-tion in both the finance function, in the planning and logistics function and in the management and marketing function as well as in the country functions. We are really well equipped to take part in the recovery that is expected in dietary supplements and beauty areas when the markets return to normal. I hope that we will soon move towards a more normalized situation in the world so that we can continue our good business, incre-ase our profitability and become better established in our new markets.

Revenue

Sales in local currencies decreased by 8.6 percent during the first quarter of the year. Converted to SEK, sales decreased by 3.5 percent and amounted to SEK 123.3 million. Sales decreased in the Nordic and Other Europe geographical areas, whereas it increased in North America and was stable in Asia. The decrease is caused by corona restrictions in several countries, omicron corona tests in pharmacies in many European countries, increased inflation, especially after the start of the Ukraine war, and zero-corona policy in China. Marketing costs have been high during the quarter and have not led to sufficient growth in sales.

Sales in the Nordic region decreased by 11.9 percent to SEK 37 M (42). Sales in other European countries decreased by 13.7 percent to SEK 44 M (51). Sales in North America increased by 23.3 percent to SEK 37 M (30). Sales in Asia and Australia had a status quo of SEK 5 million (5).

Earnings for the first quarter

Gross profit for the first quarter amounted to SEK 82.9 M (85.7). This corresponds to a gross margin of 67.2 percent (67.0). The increase can be related to shifts in the product mix. Personnel costs increased by 14.9 percent while other external costs, including sales and marketing costs, increased by 11.2 percent. In total, operating expenses increased by 11.9 percent to SEK 80.9 million (72.3). the increase in personnel and mar-keting costs was increased to create sales that did not materialize.

EBITDA amounted to SEK 2.0 million (13.4). This corresponds to an EBITDA margin of 1.7 percent (10.5). Operating profit amounted to SEK 1.8 million (13.2). This corresponds to an operating margin of 1.4 percent (10.3). Profit after financial items amounted to SEK 1.6 million (13.1). Profit after tax for the three-month period amounted to SEK 1.0 million (10.4). The result after tax was unsatisfactory.

Financial position and cash flow

Total assets increased by 11.2 percent to SEK 252.1 million (226.6). Inventories increased by 36.6 percent to SEK 120.0 million (87.9).

Current operations generated a negative cash flow of SEK 3.4 million (1.1) during the first three months of the year. Cash and cash equivalents at the end of the period amounted to SEK 10.2 million (11.5).

The Group's equity / assets ratio was 48.4 percent (52.4).

Equity divided by the outstanding 6,195,200 (6,195,200) shares as of March 31, 2022 amounted to SEK 19.69 (19.16).

Expansion

New Nordic's business creates value for the company's customers and shareholders. In 2022 and beyond, the company will continue to develop herbal supplements and beauty products to meet specific health and beauty needs. New Nordic will market these products to a growing number of consumers worldwide. All with care for people and nature. The products will be marketed under the characteristic New Nordic brand. A brand that reflects the Scandinavian cultural heritage, the Scandinavian values, and the company's passion for herbs and healthy life.

Transactions with related parties

During the period, there have been transactions with Helsehuset in Denmark, owned by Marinus Blåbjerg Sørensen and Karl Kristian Bergman Jensen. The transactions have taken place on market terms.

Parent Company

In the first three months of 2022, the Parent Company had sales of 44.4 MSEK (64.2).

Risks and uncertainties

A number of factors can affect New Nordic's results and operations. Many of these can be managed through internal routines, while some others are more affected by external influences. There are risks and uncertain-ties associated with consumer trends, weather conditions, negative macroeconomic changes, geopolitical risks, sustainability and external factors in production countries, regulatory issues, trade interventions, fo-reign currency and tax, but also in connection with expansion into new markets, the launch of new products, changes in consumer behavior and how the brand is managed. There are also certain risks related to the group's reputation, known as "reputational risks".

For a more detailed description of risks and uncertainties, please refer to the Annual Report and Consolidated Financial Statements for 2021 under "Risk Factors".

Accounting principles

This report has been prepared in accordance with the Annual Accounts Act (1995: 1554) and BNFAR 2012: 1 An-nual Report and Consolidated Accounts (K3). Information about the accounting principles in general is stated in the 2020 annual report.

Audit review

This report has not been audited by the company's auditor.

Certified Adviser

New Nordic Healtbrands AB's certified advisor is Mangold Fondkommission AB. Phone [phone].

Upcoming reports

Annual General Meeting in Malmö	April 28, 2022
Six Month Report 2022	July 29, 2022
Nine Month Report 2022	October 28, 2022
Full Year Report 2022	February 28, 2023
Annual Report 2022	March 27, 2023
Three Month Report 2023	April 27, 2023
Annual General Meeting in Malmö 2023	April 27, 2023

For further information contact:

Karl Kristian Bergman Jensen, CEO,[e-mail]

This report has not been reviewed by the company's auditors.

Malmö 28 April, 2022, New Nordic Healthbrands AB (publ)

Board of Directors

New Nordic Healthbrands AB · Hyllie Boulevard 34 · SE-215 32 Malmö · Sweden Phone: [phone]

The year-end report has not been reviewed by the company's auditor.

The Board of Directors and the CEO ensure that the interim report provides a true and fair view of the Group's ope-rations, position, and earnings. Jessica Tyreman, Board Member, Lennart Sjölund, Board Member, Marinus Blåbjerg Sørensen, Chairman of the Board, Karl Kristian Bergman Jensen, CEO and board member.

The information in this press release is that which New Nordic Healthbrands AB (publ) is required to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 (CET) on 28 April 2022.

INCOME STATEMENT

(kSEK)	Q1 2022	Q1 2021	FULL YEAR 2021
Sales	123 336	127 831
Cost of goods sold	-40 429	-42 149
Gross profit	82 907	85 682
Personnel expenses	-15 600	-13 573
Other external expenses	-65 269	-58 694
EBITDA	2 038	13 415
Depreciations	-279	-220	-935
Operating profit (EBIT)	1 759	13 195	28 547
Interest and other financial items	-196	-73	-591
Profit after financial items	1 563	13 122	27 956
Tax	-583	-2 736	-6 653
Profit for the period	980	10 386	21 303
Average number of shares	6 195 200	6 195 200	6 195 200
Number of shares by the end of the period *	6 195 200	6 195 200	6 195 200
Earnings per share, SEK	0.16	1.68	4.76
EBITDA per share, SEK	0.33	2.17	3.44
* There are no dilutive effects

514 845

-164 797

350 048

-55 784

-264 782

29 482