Bhg Group Ab · OMXSTO:BHG
Bhg Group Ab — Q1 2023 Earnings Presentation
27 slides from Bhg Group Ab's earnings presentation, Apr 23, 2023
Slide 1: 2023/Q1 Challenging quarter with very soft demand and price pressure
2023/Q1 Challenging quarter with very soft demand and price pressure in the market Inventories declined further in Q1, and cash flow improved compared with the previous year. Liquidity remains strong. 27 April 2023 1
Slide 2: Today's presenters
Today’s presenters Gustaf Öhrn President and CEO Jesper Flemme CFO 27 April 2023 2
Slide 3: Agenda
Agenda • Q1 2023 highlights • Financial update • Conclusions • Q&A 27 April 2023 3
Slide 4: Select financial highlights – Q1 2023
Select financial highlights – Q1 2023 Sales Earnings Cash flow Cash flow from operating Net Sales (SEK) Adj. EBIT(SEK) activities (SEK) 2,618m -69m 211m Total: -15.9% Pro-forma organic: -15.5% Organic: -16.8% -2.6% (Q1 2022: 122m) Growth Adj. EBIT margin Inventory declined further and cash flow was
Slide 5: Difficult market situation – contracting market last 7 quarters
Difficult market situation – contracting market last 7 quarters BHG organic growth, Y-on-Y development Exceptional growth Contracting market 42% 36% 37% 32% 20% 22% 15% 14% 8% 9% 6% 2% 1% -5% -4% -8% -17% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 19 19 19 19 20 20 20 20 21 21 21 21 22 22 22
Slide 6: Challenging start to 2023, but our actions are gaining traction
Challenging start to 2023, but our actions are gaining traction • Revised strategy Revised Strategy • Three new business units based on business model to facilitate realisation of and structural synergies changes • Simplify structure by consolidations and closings of businesses • Investing in tech t
Slide 7: Structural changes to reduce complexity and leverage synergies
Structural changes to reduce complexity and leverage synergies – major steps taken in all BUs We are executing on our long-term strategic plan which includes both structural measures intended to reduce complexity, leverage synergies and secure scalable solutions, as well as growth through organic ge
Slide 8: Several actions taken and ongoing to consolidate and simplify our businesses
Several actions taken and ongoing to consolidate and simplify our businesses – more to come • Consolidation of Polarpumpen into Bygghemma • Consolidation of Finnish legal entities and discontinuation of Edututor Home Improvement • Operational consolidation of Nordiska Fönster and LSBolagen into Hafa
Slide 9: Agenda
Agenda • Q1 2023 highlights • Financial update • Conclusions • Q&A 27 April 2023 9
Slide 10: A very tough quarter – weak profitability
A very tough quarter – weak profitability Market in Q1 was softer than expected in our original EBIT margin impacted by price pressure in the market outlook due to high inventories and very weak demand Net sales (SEKm) Adjusted EBIT (SEK) Adjusted EBIT margin -15.9% Pro-forma organic growth: -15.5%
Slide 11: Weak demand and pressured profitability across our BUs
Weak demand and pressured profitability across our BUs Home Improvement Value Home Premium Living SEKm SEKm SEKm Net Sales EBIT margin Net Sales EBIT margin Net Sales EBIT margin -22% 1 543 3.5% -3.7% 5.5% -2.0% 6.3% 2.4% -14% 1 197 1 096 943 -7% EBIT EBIT 534 EBIT 498 53 -45 60 -19 33 12 Q1'22 Q1'2
Slide 12: EBIT margin bridge 2022 Q1 to 2023 Q1
EBIT margin bridge 2022 Q1 2023 Q1 • Product margin (i.e. before deduction of Fulfilment, Last-mile and Other Direct selling costs) amounted EBIT margin Q1 '22 4,3% to 37.8%, - 1.9p.p. lower than same period last year • Negatively impacted by price pressure in the Product margin market as a result
Slide 13: Cash flow and liquidity position improved in Q1
Cash flow and liquidity position improved in Q1 Significant improvement in cash flow from operating Liquidity mainly driven by cash flow from operating activities compared to last year (Q1 2022: 122m) activities (due to changes in working capital) Jan-Mar 2023 (SEKm) SEKm Including translation 210,8
Slide 14: We feel confident in our plan to get back to the capital structure target
We feel confident in our plan to get back to the capital structure target Overview of financial position • Net debt / EBITDA of 4.82x, outside the range of SEKm 31 March 2023 the Group’s medium-term capital structure target Interest bearing liabilities 4,257.1 • Previously announced measures to impr
Slide 15: Agenda
Agenda • Q1 2023 highlights • Financial update • Conclusions • Q&A 27 April 2023 15
Slide 16: Q1 Summary
Q1 Summary We expect the market to remain challenging in 2023 Challenging market Prioritizing cash flow and profitability Focus on operational short-term actions to drive sales in challenging market Three new segments from 1 January 2023, to facilitate synergies Revised strategy & structural
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Slide 18: Appendix
Appendix 27 April 2023 18
Slide 19: Condensed consolidated financial information
Condensed consolidated financial information Jan-Mar Jan-Dec SEKm (if not otherwise stated) 2023 2022 ∆% 2022 Net sales 2,617.5 3,110.6 -15.9 13,433.6 Gross profit 641.3 841.7 -23.8 2,981.1 Gross margin (%) 24.5 27.1 -2,6 p.p. 22.2 Adjusted gross profit* 641.3 841.7 -23.8 3,368.3 Adjusted gross marg
Slide 20: Home Improvement segment
Home Improvement segment Jan-Mar Jan-Dec SEKm (if not otherwise stated) 2023 2022 ∆% 2022 Net sales 1,197.2 1,543.3 -22.4 6,856.3 Gross profit 246.3 350.1 -29.6 1,387.0 Gross margin (%) 20.6 22.7 -2,1 p.p. 20.2 Adjusted gross profit 246.3 350.1 -29.6 1,521.0 Adjusted gross margin (%) 20.6 22.7 -2,1
Slide 21: Value Home segment
Value Home segment Jan-Mar Jan-Dec SEKm (if not otherwise stated) 2023 2022 ∆% 2022 Net sales 943.2 1,095.9 -13.9 4,558.7 Gross profit 279.0 361.5 -22.8 1,113.4 Gross margin (%) 29.6 33.0 -3,4 p.p. 24.4 Adjusted gross profit 279.0 361.5 -22.8 1,355.1 Adjusted gross margin (%) 29.6 33.0 -3,4 p.p. 29.
Slide 22: Premium Living segment
Premium Living segment Jan-Mar Jan-Dec SEKm (if not otherwise stated) 2023 2022 ∆% 2022 Net sales 498.0 533.7 -6.7 2,172.1 Gross profit 118.0 131.4 -10.2 487.8 Gross margin (%) 23.7 24.6 -0,9 p.p. 22.5 Adjusted gross profit 118.0 131.4 -10.2 499.4 Adjusted gross margin (%) 23.7 24.6 -0,9 p.p. 23.0 A
Slide 23: P&L
P&L Jan-Mar Jan-Dec SEKm 2023 2022 2022 Net sales 2,617.5 3,110.6 13,433.6 Other operating income 1.6 15.6 17.1 Total net sales 2,619.1 3,126.2 13,450.7 Cost of goods sold -1,976.2 -2,268.8 -10,452.5 Personnel costs -279.5 -278.4 -1,142.3 Other external costs and operating expenses -308.9 -353.8 -1,
Slide 24: Balance sheet
Balance sheet 31 Mar 31 dec SEKm 2023 2022 2022 Non-current assets Goodwill 6,491.4 6,385.7 6,480.9 Other intangible fixed assets 2,861.7 2,900.8 2,879.2 Total intangible fixed assets 9,353.1 9,286.5 9,360.1 Buildings and land 21.3 22.1 21.5 Leased fixed assets 987.0 918.2 902.2 Tangible fixed asset
Slide 25: Consolidated statement of cash flows
Consolidated statement of cash flows Jan-Mar Jan-Dec SEKm 2023 2022 2022 EBITDA 54.1 221.2 369.2 Adjustments for items not included in cash flow 18.8 -17.8 369.2 Income tax paid -86.0 -103.2 -216.2 Cash flow from operating activities before changes in working capital -13.1 100.3 522.2 Changes in wor
Slide 26: Reconciliation of non-IFRS metrics
Reconciliation of non-IFRS metrics Jan-Mar Jan-Dec Jan-Mar Jan-Dec SEKm 2023 2022 2022 SEKm 2023 2022 2022 Operating income -100.1 97.9 -183.9 Adjusted EBITDA 60.0 232.4 813.8 Adjusted gross profit 641.3 841.7 3,368.3 Costs related to LTIP 5.6 - - Difference between adjusted gross profit and adjuste
Slide 27: WE MAKE LIVING EASY
WE MAKE LIVING EASY