Bhg Group Ab · OMXSTO:BHG
Bhg Group Ab — Q2 2020 Earnings Presentation
30 slides from Bhg Group Ab's earnings presentation, Jul 23, 2020
Slide 1: 2020/Q2 Exceptional growth
2020/Q2 Exceptional growth A record-breaking quarter for growth, profit and cash generation 7/23/2020 1
Slide 2: Today’s presenters
2020/Q2 Today’s presenters Adam Schatz Jesper Flemme President and CEO Acting CFO • BHG since 2019 • BHG since 2016 • Axiell Group 2015-2019 (CFO, Head of Business Division) • Addedo 2014-2016 (Senior Consultant) • Gambro and Baxter 2008-2015 (Regional CFO, Head of • CDON Group (now Qliro Group) 201
Slide 3: Agenda
Agenda • Results highlights • Business update • Financial update Q2 2020 • Group • DIY segment • Home Furnishing segment • Cash flow and financial position • Summary • Q&A 7/23/2020 3
Slide 4: Agenda
Agenda • Results highlights • Business update • Financial update Q2 2020 • Group • DIY segment • Home Furnishing segment • Cash flow and financial position • Summary • Q&A 7/23/2020 4
Slide 5: Select financial highlights
2020/Q2 Select financial highlights Strongest quarter to date Sales Earnings Cash flow Net Sales (SEK) Adj. EBIT (SEK) Cash flow from operating activities (SEK) 2,695m 233m 605m Total: 57.7% Organic: 41.8% 8.6% 220.2% Growth Adj. EBIT margin Cash conversion* A record-breaking quarter for growth, pro
Slide 6: Focus on organic growth
2020/Q2 Focus on organic growth Q-on-Q acceleration 41,8% 22,1% 19,9% 14,7% 8,0% 8,6% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Organic growth has accelerated, five quarters straight 7/23/2020 6
Slide 7: Our strategy remains focused on four cornerstones
Our strategy remains focused on four cornerstones The BHG ecosystem 1. 2. 3. 4. Continued Scale and a Creating the most Offering the market’s expansion of our growing share of appealing digital best professional already leading own brands in our shopping guidance, service and product range sales mix
Slide 8: Agenda
Agenda • Results highlights • Business update • Financial update Q2 2020 • Group • DIY segment • Home Furnishing segment • Cash flow and financial position • Summary • Q&A 7/23/2020 8
Slide 9: BHG at a glance
2020/Q2 BHG at a glance Significant scale and profitability The European online leader in home improvement 0.4% 2.5% 3.9% 5.0% 4.1% 5.3% 4.7% 5.4% 6.4% 7 607 6 621 6 212 CAGR 5 460 +41% 4 974 3 956 2 604 Net sales Apr-Jun 2020 Other 1 895 Norway 7% Home 1 096 5% furnishing DIY 67% Denmark 33% 11% Sw
Slide 10: Coronavirus situation and its effect on BHG’s business
2020/Q2 Coronavirus situation and its effect on BHG’s business Operational Sales • Moved select office teams to home office, clearly separating white collar and blue collar teams, limited • Nordic consumers have spent more time at home travel, moved meetings to video conference and travelled less. D
Slide 11: Agenda
Agenda • Results highlights • Business update • Financial update Q2 2020 • Group • DIY segment • Home Furnishing segment • Cash flow and financial position • Summary • Q&A 7/23/2020 11
Slide 12: Record breaking performance for the quarter
2020/Q2 Record breaking performance for the quarter Highest quarterly net sales to date – particularly strong Strongest quarterly EBIT and EBIT margin to date – disciplined growth in the DIY segment strategy execution and growing share of private label in DIY Net sales (SEKm) Adjusted EBIT (SEK) Adj
Slide 13: Continued strong development in KPIs
2020/Q2 Continued strong development in KPIs # of visits # orders Conversion Average order (000’s) (000’s) rate, (%) value (SEK) 91,615 893 1.0% 3,188 +110% +78% -0.2p.p. -7% Strong growth on the basis of sound fundamentals 7/23/2020 13
Slide 14: Continued improved gross margin trajectory
2020/Q2 Continued improved gross margin trajectory Gross margin improvement driven by continued focus on Margin trajectory the result of the improvement plan in Home cost and process efficiencies and increasing share of Furnishing launched in the 2nd half of 2018 coupled with the private label boost
Slide 15: Exceptionally strong second quarter
2020/Q2 DIY segment Exceptionally strong second quarter • Net sales increased by 73.8% of which DIY represented 67% of the Record-high adjusted EBIT organic growth accounted for 48.3% - Group’s net sales in the second quarter continued to consolidate position as the Net Sales (SEKm) Gross margin Adj
Slide 16: Seventh consecutive quarter of good growth and margins
2020/Q2 Home Furnishing segment Seventh consecutive quarter of good growth and margins • Net sales increased by 32.3% of which Home Furnishing represented 33% of the Solid growth in adjusted EBIT organic growth accounted for 31.5% Group’s net sales in the second quarter Net Sales (SEKm) Gross margin
Slide 17: Record breaking cash generation in the quarter
2020/Q2 Cash flow and financial position Record breaking cash generation in the quarter The exceptional quarter demonstrated BHG’s attractive business model Liquidity driven by strongest first and second quarter with low tied-up capital and high cash flows when growth is strong contribution from cas
Slide 18: BHG’s financial position is stronger than ever
2020/Q2 Cash flow and financial position BHG’s financial position is stronger than ever Overview of financial position SEKm 30 Jun 2020 • Net cash amounted to SEK 27m, hence Interest bearing liabilities 2,095.9 outperforming Net debt / EBITDA target (898.1) of 1.5 – 2.5x Cash and cash equivalents Ad
Slide 19: Agenda
Agenda • Results highlights • Business update • Financial update Q2 2020 • Group • DIY segment • Home Furnishing segment • Cash flow and financial position • Summary • Q&A 7/23/2020 19
Slide 20: Q2 Summary
Q2 Summary BHG stands strong • Strong position at the end of Q1 – further strengthened during Q2 Accelerating growth • Five quarters of accelerating growth, total as well as organic Strong gross and • Strongest adj. EBIT margin to date – on the back of continued gross margin bottom-line margins expa
Slide 21: Agenda
Agenda • Results highlights • Business update • Financial update Q2 2020 • Group • DIY segment • Home Furnishing segment • Cash flow and financial position • Summary • Q&A 7/23/2020 21
Slide 22: Appendix
bg. 7/23/2020 Appendix 22
Slide 23: Condensed consolidated financial information
Condensed consolidated financial information Apr-Jun Jan-Jun Jan-Dec SEKm (if not otherwise stated) 2020 2019 ∆% 2020 2019 ∆% 2019 Net sales 2,694.9 1,708.8 57.7 4,323.3 2,928.9 47.6 6,212.5 Gross profit 675.5 397.6 69.9 1,096.0 698.1 57.0 1,490.5 Gross margin (%) 25.1 23.3 1.8 p.p. 25.4 23.8 1.5 p.
Slide 24: DIY segment
DIY segment Apr-Jun Jan-Jun Jan-Dec SEKm (if not otherwise stated) 2020 2019 ∆% 2020 2019 ∆% 2019 Net sales 1,818.7 1,046.2 73.8 2,760.1 1,734.8 59.1 3,700.8 Gross profit 413.1 214.9 92.3 627.1 363.8 72.4 794.3 Gross margin (%) 22.7 20.5 2.2 p.p. 22.7 21.0 1.8 p.p. 21.5 Adjusted EBITDA 185.5 68.1 17
Slide 25: Home Furnishing segment
Home Furnishing segment Apr-Jun Jan-Jun Jan-Dec SEKm (if not otherwise stated) 2020 2019 ∆% 2020 2019 ∆% 2019 Net sales 885.8 669.8 32.3 1,580.4 1,203.9 31.3 2,533.1 Gross profit 262.7 183.4 43.2 469.7 335.1 40.2 697.5 Gross margin (%) 29.7 27.4 2.3 p.p. 29.7 27.8 1.9 p.p. 27.5 Adjusted EBITDA 103.0
Slide 26: P&L
P&L Apr-Jun Jan-Jun Jan-Dec SEKm 2020 2019 2020 2019 2019 Net sales 2,694.9 1,708.8 4,323.3 2,928.9 6,212.5 Other operating income 3.2 -0.0 0.1 0.0 0.3 Total net sales 2,698.1 1,708.7 4,323.3 2,928.9 6,212.7 Cost of goods sold -2,019.4 -1,311.1 -3,227.3 -2,230.8 -4,721.9 Personnel costs -166.3 -123.
Slide 27: Balance sheet
Balance sheet 30 Jun 31 Dec SEKm 2020 2019 2019 Non-current assets Goodwill 3,011.0 2,713.5 2,896.7 Other intangible fixed assets 1,320.5 1,268.3 1,293.6 Total intangible fixed assets 4,331.6 3,981.8 4,190.2 Buildings and land 10.6 11.4 10.7 Leased fixed assets 480.2 348.7 459.2 Tangible fixed asset
Slide 28: Consolidated statement of cash flows
Consolidated statement of cash flows Apr-Jun Jan-Jun Jan-Dec SEKm 2020 2019 2020 2019 2019 EBITDA 273.5 135.5 408.6 214.2 467.8 Adjustments for items not included in cash -0.3 0.7 -6.2 9.2 7.9 flow Income tax paid -17.0 -13.0 -31.8 -23.9 -34.4 Cash flow from operating activities before 256.3 123.1 3
Slide 29: Reconciliation of non-IFRS metrics
Reconciliation of non-IFRS metrics Apr-Jun Jan-Jun Jan-Dec SEKm 2020 2019 2020 2019 2019 Operating income 222.0 91.9 291.2 130.2 282.0 Acquisition-related costs - 0.3 - 1.7 1.7 Last-mile project - - - 5.8 5.8 Total items affecting comparability - 0.3 - 7.5 7.5 Amortisation and impairment of acquisit
Slide 30: WE MAKE LIVI?
WE MAKE LIVI?