Bhg Group Ab · OMXSTO:BHG
Bhg Group Ab — Bygghemma Group — Q3 2018 Earnings Presentation
28 slides from Bhg Group Ab's earnings presentation, 2018
Slide 1: Double-digit sales growth despite challenging trading conditions
Q3 2018 DOUBLE-DIGIT SALES GROWTH DESPITE CHALLENGING TRADING CONDITIONS Bygghemma Group First AB (publ) 1
Slide 2: Today's presenters
Q3 2018 Today’s presenters Mikael Olander Martin Edblad President and CEO CFO § Bygghemma Group since 2012 § Bygghemma Group since 2012 § CEO of CDON Group (2000-12) § CFO of CDON Group (now Qliro Group) (2010-12) § Manager at Egmont (1995-00) § CFO of MTG’s online business area (2004-10) § Former m
Slide 3: Agenda
Q3 2018 Agenda § Results highlights § Business update § Financial update Q3 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 3
Slide 4: Agenda
Q3 2018 Agenda § Results highlights § Business update § Financial update Q3 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 4
Slide 5: Significant growth despite challenging environment
Q3 2018 Significant growth despite challenging environment Sales growth continues to outperform Flat EBITA Jan-Sep due to gross margin Robust cash flow generation Jan-Sep, the Nordic overall market headwinds and strategic initiatives although seasonal timing effects in Q3 Net sales (SEKm) Organic gr
Slide 6: Agenda
Q3 2018 Agenda § Results highlights § Business update § Financial update Q3 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 6
Slide 7: Bygghemma Group at a glance
Q3 2018 Bygghemma Group at a glance The clear Nordic online leader in home improvement Significant scale and profitability 0.4% 2.5% 3.9% 5.0% 5.1% 3.2% 4 774 4,419 CAGR +53% 3 496 2 604 Net sales Jan-Sep 2018 1 895 Denmark Other Norway 6% 1% 12% 1 096 Home furnishing 38% DIY 62% Finland 17% Sweden
Slide 8: Q3 highlights
Q3 2018 Q3 highlights Double-digit growth for § 11% YoY growth driven by +14% organic growth in DIY – significantly outperforming the Group the Nordic market (which decreased by ~5% in the quarter), despite challenging weather § Bygghemma Group to establish own distribution network for last-mile del
Slide 9: Market position strengthened by two exciting add-ons
Q3 2018 Market position strengthened by two exciting add-ons § Leading online player in Finland with proprietary brands in grilling, LED lighting and kitchen products § Acquisition to primarily strengthen category expertise and leadership § Founded in 2010 and annual CAGR of 37% since then § In 2017
Slide 10: EBITA was adversely impacted by external factors also in Q3
Q3 2018 EBITA was adversely impacted by external factors also in Q3 § External factors impacted EBITA by approximately SEK 25m in the Illustrative impact on the Group’s adjusted EBITA period (from SEK -12m in Q2), of which SEK ~13 in the home furnishing segment and SEK ~12m in the DIY segment Q3 201
Slide 11: Agenda
Q3 2018 Agenda § Results highlights § Business update § Financial update Q3 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 11
Slide 12: Net sales growth mainly driven by order growth
Group Q3 2018 Net sales growth mainly driven by order growth Continued strong development in KPIs – conversion rate improving by 15% YoY FI, DK and NO continued to outgrow Sweden Net sales (SEKm) Organic growth +15% 28 589 # of visits 24 911 (000’s) Q3 2017 Q3 2018 +11% +34% 1 251,1 426 +9% # of ord
Slide 13: Investments to unlock future growth also impacted EBITA
Group Q3 2018 Investments to unlock future growth also impacted EBITA Gross margin was impacted by weakened SEK EBITA also impacted by strategic initiatives (vs. EUR and USD) and higher polyethylene price and integration of recent M&A Adjusted gross margin SEKm Adjusted EBITA margin (1.4 ppt) 21,9%
Slide 14: Continued outperformance of the overall market
DIY segment Q3 2018 Continued outperformance of the overall market DIY represented 64% of the § Net sales increased by 21.1%, of which Group’s net sales in the third quarter Solid EBITA growth of 12% organic growth accounted for 14.1% § Adjusted EBITA margin was 4.5% (4.9), Net sales (SEKm) Adjusted
Slide 15: Sustained YTD market share gains despite headwinds
Home furnishing segment Q3 2018 Sustained YTD market share gains despite headwinds Home furnishing represented 36% of the EBITA margin impacted by lower gross § Net sales decreased by 3.2 percent during Group’s net sales in the third quarter profit in Sweden and recent M&A the quarter, with organic
Slide 16: Strong cash generation
Cash flow and financial position Q3 2018 Strong cash generation Jan-Sep cash conversion exceeding the financial target – driven by release of NWC and low capex Liquidity driven by strong operating cash flow Jan-Sep 2018 (SEKm) Cash conversion SEKm 109% 61,0 (46.3) M&A capex of SEK (29.8)m in the 178
Slide 17: Financial position remains solid
Cash flow and financial position Q3 2018 Financial position remains solid Overview of financial position § Net debt / EBITDA in line with the financial target of 1.5 – 2.5x § The Group’s unutilised credit facilities amounted to SEK 406.4 million SEKm 30 Sep 2018 at the end of the period, compared wi
Slide 18: Agenda
Q3 2018 Agenda § Results highlights § Business update § Financial update Q3 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 18
Slide 19: Summary
Q3 2018 Summary § Challenging quarter in many aspects – however clear signs that recent headwinds are normalising § Double-digit sales growth in Q3 despite adverse external factors, growth driven by the DIY segment that continues to significantly outgrow the market § Market share gains also in Home
Slide 20: Agenda
Q3 2018 Agenda § Results highlights § Business update § Financial update Q3 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 20
Slide 21: Appendix
Appendix Bygghemma First Holding AB 21
Slide 22: Condensed consolidated financial information
Q3 2018 Condensed consolidated financial information Q3 Jan-Sep Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2018 2017 ∆% 2017 Net Sales 1 251,1 1 126,2 11,1 3 694,0 2 875,9 28,4 3 955,5 Gross profit 244,8 234,9 4,2 749,3 585,8 27,9 820,0 Gross margin (%) 19,6 20,9 -6,2 20,3 20,4 -0,4 20,7 Ad
Slide 23: DIY segment
Q3 2018 DIY segment Q3 Jan-Sep Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2018 2017 ∆% 2017 Net Sales 798,6 659,5 21,1 2 306,3 1 696,8 35,9 2 342,2 Gross profit 155,4 130,6 19,0 451,6 329,1 37,2 468,4 Gross margin (%) 19,5 19,8 -1,7 19,6 19,4 1,0 20,0 Adjusted gross profit 155,4 130,6 19,0
Slide 24: Home furnishing segment
Q3 2018 Home furnishing segment Q3 Jan-Sep Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2018 2017 ∆% 2017 Net Sales 457,0 471,9 -3,2 1 402,6 1 191,4 17,7 1 628,9 Gross profit 88,7 105,7 -16,1 299,3 258,0 16,0 354,0 Gross margin (%) 19,4 22,4 -13,3 21,3 21,7 -1,5 21,7 Adjusted gross profit 100
Slide 25: P&L
Q3 2018 P&L Q3 Jan-Sep Jan-Dec SEKm 2018 2017 2018 2017 2017 Net Sales 1 251,1 1 126,2 3 694,0 2 875,9 3 955,5 Other operating income 0,3 2,9 - 3,7 6,1 Total Net Sales 1 251,4 1 129,0 3 694,0 2 879,5 3 961,7 Cost of goods sold -1 006,3 -891,3 -2 944,7 -2 290,1 -3 135,6 Personnel costs -96,5 -84,7 -3
Slide 26: Balance sheet
Q3 2018 Balance sheet 30 Sep 31 Dec SEKm 2018 2017 2017 Non-current assets Goodwill 2 567,7 2 376,7 2 451,1 Other intangible fixed assets 1 214,9 1 117,2 1 166,3 Total intangible fixed assets 3 782,6 3 493,8 3 617,4 Buildings and land 11,2 10,6 10,8 Tangible fixed assets 23,0 21,4 21,4 Financial fix
Slide 27: Consolidated statement of cash flows
Q3 2018 Consolidated statement of cash flows Q3 Jan-Sep Jan-Dec SEKm 2018 2017 2018 2017 2017 Cash flow from operating activities before changes in 28,3 33,4 37,0 70,8 67,3 working capital Changes in working capital -75,1 -22,9 61,0 45,1 73,7 Cash flow from operations -46,7 10,5 98,0 115,9 141,1 Inv
Slide 28: Reconciliation of non-IFRS metrics
Q3 2018 Reconciliation of non-IFRS metrics Q3 Jan-Sep Jan-Dec SEKm 2018 2017 2018 2017 2017 Operating income 17,4 36,3 43,1 86,3 91,5 Depreciation and amortization of acquisition related 9,4 8,5 28,0 22,8 32,1 intangible fixed assets EBITA 26,7 44,8 71,1 109,1 123,6 EBITA (%) 2,1 4,0 1,9 3,8 3,1 Acq