CEO’s review

“Q2, continued growth, improving gross margin and strategic progress“– David Rönnberg, Musti Group CEO

The second quarter marked another period of solid growth for Musti Group. H1 net sales growth of 14.7% to EUR 277.1 (241.5) million was supported by Q2’s net sales growth of 13.8% to EUR 138.5 (121.7) million. Like-for-like growth of 3.0% for the first half and 2.1% in the quarter was temporarily impacted by the re-platforming of our e-commerce offering. Store traffic reflects resilient underlying demand across our core markets and the expansion of our customer base to 1.9 million pet parents demonstrates the ongoing appeal of our network and its offering.

The New Market segment contributed EUR 17.0 million in sales with an improving profitability pattern. Baltic market sales and profitability benefited from integration initiatives including the optimization of assortment and the introduction of Musti’s extensive range of exclusive products though affected by the Baltic region’s unsettled consumer confidence. The integration of Zu is underway with the benefits expected to contribute towards the end of the year.

Gross margin expansion of 50 bps to 44.3% (43.8%) highlights the flow through from the strategic investments we have been implementing and supported adjusted EBITDA increasing to EUR 28.3 (25.7) million in H1 and EUR 14.0 (12.9) million in the quarter strengthening our competitive position and long-term profitability expansion goals.

Our profitability continues to be affected by strategic investments in growth and scalability with approximately EUR 1.9 million impacting adjusted EBITDA YTD. Initiatives include digital platform development, logistics improvements, ERP investments and assortment optimization. While these investments increase our cost base in the short term, they are designed to enhance efficiency, scalability and customer experience, creating a stronger platform for future growth.

Our core markets continue to perform well. Norway delivered exceptional growth and profitability improvements. Finland remained stable despite the impact of the e-commerce platform transition. Sweden maintained positive momentum in customer acquisition and network expansion which will be further enhanced by our acquisition of ICA’s Gaston stores and developing long term partnership. The integration of Pet City in the Baltics is approaching its final stages, and the integration of ZU in Portugal is progressing according to plan.

Looking ahead, we remain confident in the prospects for the pet care market. The structural trends of pet parenting continue to support demand for premium products and services, while improving consumer conditions will gradually support market growth across Europe. Our strategy remains unchanged: to grow faster than the market through customer-centric innovation, operational excellence, vertical integration and disciplined geographic expansion.

On behalf of our board and leadership team, I would like to sincerely thank all our team members for their commitment, professionalism and passion. Their dedication enables us to serve pet parents across Europe every day and is the foundation of our success.

David Rönnberg

CEO