Bhg Group Ab · OMXSTO:BHG
Bhg Group Ab — Bygghemma Group — Q2 2018 Earnings Presentation
30 slides from Bhg Group Ab's earnings presentation, 2018
Slide 1: Record sales, EBITA and cash flow – accelerated organic growth to 19%
Q2 2018 RECORD SALES, EBITA AND CASH FLOW – ACCELERATED ORGANIC GROWTH TO 19 % Bygghemma Group First AB (publ) 1
Slide 2: Today's presenters
Q2 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 (2010-12) § Manager at Egmont (1995-00) § Various financial positions at MTG, incl. CFO of MTG’s online business §
Slide 3: Agenda
Q2 2018 Agenda § Results highlights § Business update § Financial update Q2 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 3
Slide 4: Agenda
Q2 2018 Agenda § Results highlights § Business update § Financial update Q2 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 4
Slide 5: Results highlights – accelerated organic growth
Q2 2018 Results highlights – accelerated organic growth Strong sales growth: Increasing EBITA despite impacted by Strong operating cash flow: organic growth driven by DIY segment negative FX and higher polyethylene price significantly outgrowing EBITDA Net sales (SEKm) Organic growth Adjusted EBITA
Slide 6: Agenda
Q2 2018 Agenda § Results highlights § Business update § Financial update Q2 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
Q2 2018 Bygghemma Group at a glance The clear Nordic online leader in home improvement Significant scale and profitability 0.4% 2.5% 3.9% 4.6% 5.0% 4.6% 4 649 4,419 CAGR +59% 3 066 2 604 Net sales (Q2 2018) 1 895 Denmark 12% Norway 1 096 5% Home furnishing DIY 39% Finland 61% 16% 2014 2015 2016 2017
Slide 8: Business highlights for Q2
Q2 2018 Business highlights for Q2 31% INCREASED SERVICE Group net sales growth STRONG TOPLINE PERFORMANCE ACROSS LEVELS FOR CUSTOMERS 19% ALL COUNTRIES – AS A RESULT OF Group organic growth TARGETED EFFORTS AND – DIY IN PARTICULAR 24% DIY organic growth ONGOING INVESTMENTS LAUNCH OF FINANCIAL INSTA
Slide 9: Negative margin impact of SEK -12m in home furnishing
Q2 2018 Negative margin impact of SEK -12m in home furnishing § We report our highest adjusted EBITA to date, despite a negative Illustrative impact on the Group’s adjusted gross profit impact of approximately SEK -12 million in the quarter § The following factors impacted profitability: Q2 2018 1 W
Slide 10: On track to deliver on the financial targets
Q2 2018 On track to deliver on the financial targets H1 2018 actuals § Bygghemma Group aims to grow net sales by 20 – 25% on average per year Net sales in the medium term, of which approximately 15% attributable to organic growth ü Net sales growth of 40% ü growth § The Company’s objective is to rea
Slide 11: Increasing online penetration drives future growth
Q2 2018 Increasing online penetration drives future growth Online penetration levels at various stages hint to the market potential Nordic home improvement market (2016) Illustrative Nordic market size SEK ~230bn SEK ~69bn1) @ 30% online penetration Net sales SEK ~35bn1) @ 15% online penetration SEK
Slide 12: Why Bygghemma Group
Q2 2018 Why Bygghemma Group Targeting a large Nordic customer segment (home improvement market of SEK ~230bn in 2017E) Bygghemma Group is the clear Nordic online pure-play B2C leader with strong profitable growth potential ~100% growth is expected in the online channel of the home improvement market
Slide 13: Agenda
Q2 2018 Agenda § Results highlights § Business update § Financial update Q2 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 13
Slide 14: Net sales growth mainly driven by order growth
Group Q2 2018 Net sales growth mainly driven by order growth Continued strong development in KPIs Strong growth mainly driven by online penetration – conversion rate improving by 15% YoY – FI, DK and NO outgrowing Sweden Net sales (SEKm) Organic growth +21% 24 641 29 827 # of visits (000’s) Q2 2017
Slide 15: Increased adjusted EBITA – all time high for Q2
Group Q2 2018 Increased adjusted EBITA – all time high for Q2 Gross margin was impacted by weakened SEK EBITA margin impacted by SG&A investments in strategic (vs. EUR and USD) and higher polyethylene price initiatives, central HC needed for listing and by M&A Adjusted gross margin SEKm Adjusted EBI
Slide 16: DIY segment: Accelerated organic growth to 24%
DIY segment Q2 2018 Accelerated organic growth to 24% DIY represented 61% of EBITA impacted by acquisitions and § Net sales increased by 40.7%, of which the Group’s net sales in Q2 2018 SG&A investments in strategic initiatives organic growth accounted for 23.9% § Adjusted EBITA margin was 5.0% (5.4
Slide 17: Home furnishing segment: Organic growth of 9% despite external factors
Home furnishing segment Q2 2018 Organic growth of 9% despite external factors Home furnishing represented 39% of EBITA margin impacted by lower gross § Net sales increased by 17.9%, of which the Group’s net sales in Q2 2018 profit in Sweden and recent M&A organic growth accounted for 8.8%, hampered
Slide 18: Cash conversion of 218% in Q2
Cash flow and financial position Q2 2018 Cash conversion of 218% in Q2 Cash conversion exceeding the financial target – driven by release of NWC and low capex Liquidity driven by strong operating cash flow Q2 2018 (SEKm) Cash conversion SEKm 218% Mainly driven by the new share issue and 112,2 (19.3)
Slide 19: Net debt / EBITDA of 1.5x at the end of quarter
Cash flow and financial position Q2 2018 Net debt / EBITDA of 1.5x at the end of quarter Strong financial position § Materially reduced net debt and interest expense following the new share issue and refinancing in connection with the IPO SEKm 30 Jun 2018 § Debt refinancing occurred in early April I
Slide 20: Agenda
Q2 2018 Agenda § Results highlights § Business update § Financial update Q2 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 20
Slide 21: Summary
Q2 2018 Summary § We are proud to report our strongest quarter ever with more than SEK 1.4 billion in net sales, our highest adjusted EBITA to date and record strong operating cash flow § Accelerated organic growth to 19% mainly driven by order growth as well as improved online penetration – this fu
Slide 22: Agenda
Q2 2018 Agenda § Results highlights § Business update § Financial update Q2 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary § Q&A Bygghemma Group First AB (publ) 22
Slide 23: Appendix
Appendix Bygghemma First Holding AB 23
Slide 24: Condensed consolidated financial information
Q2 2018 Condensed consolidated financial information Q2 Jan-Jun Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2018 2017 ∆% 2017 Net Sales 1,417.8 1,080.0 31.3 2,442.9 1,749.7 39.6 3,955.5 Gross profit 291.5 218.8 33.2 504.6 350.8 43.8 820.0 Gross margin (%) 20.6 20.3 1.5 20.7 20.1 3.0 20.7 Adj
Slide 25: DIY segment
Q2 2018 DIY segment Q2 Jan-Jun Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2018 2017 ∆% 2017 Net Sales 900.5 640.0 40.7 1,507.7 1,037.3 45.3 2,342.2 Gross profit 172.6 124.8 38.3 296.2 198.5 49.2 468.4 Gross margin (%) 19.2 19.5 -1.7 19.6 19.1 2.6 20.0 Adjusted gross profit 172.6 124.8 38.3
Slide 26: Home furnishing segment
Q2 2018 Home furnishing segment Q2 Jan-Jun Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2018 2017 ∆% 2017 Net Sales 524.0 444.3 17.9 945.6 719.5 31.4 1,628.9 Gross profit 120.3 94.1 27.9 210.6 152.3 38.3 354.0 Gross margin (%) 23.0 21.2 8.5 22.3 21.2 5.2 21.7 Adjusted gross profit 127.4 103.8
Slide 27: P&L
Q2 2018 P&L Q2 Jan-Jun Jan-Dec SEKm 2018 2017 2018 2017 2017 Net Sales 1,417.8 1,080.0 2,442.9 1,749.7 3,955.5 Other operating income - 1.1 - 0.8 6.1 Total Net Sales 1,417.8 1,081.1 2,442.9 1,750.5 3,961.7 Cost of goods sold -1,126.4 -861.2 -1,938.3 -1,398.8 -3,135.6 Personnel costs -102.4 -73.2 -20
Slide 28: Balance sheet
Q2 2018 Balance sheet 30 Jun 31 Dec SEKm 2018 2017 2017 Non-current assets Goodwill 2,462.4 2,353.5 2,451.1 Other intangible fixed assets 1,169.1 1,124.0 1,166.3 Total intangible fixed assets 3,631.5 3,477.5 3,617.4 Buildings and land 11.3 10.8 10.8 Tangible fixed assets 22.1 22.2 21.4 Financial fix
Slide 29: Consolidated statement of cash flows
Q2 2018 Consolidated statement of cash flows Q2 Jan-Jun Jan-Dec SEKm 2018 2017 2018 2017 2017 Cash flow from operating activities before changes in working 50.6 35.9 8.6 37.4 67.3 capital Changes in working capital 112.2 96.2 136.1 68.0 73.7 Cash flow from operations 162.8 132.0 144.7 105.4 141.1 In
Slide 30: Reconciliation on non-IFRS metrics
Q2 2018 Reconciliation on non-IFRS metrics Q2 Jan-Jun Jan-Dec SEKm 2018 2017 2018 2017 2017 Operating income 55.0 44.3 25.8 50.0 91.5 Depreciation and amortization of intangible fixed assets 9.3 7.6 18.6 14.3 32.1 EBITA 64.3 51.9 44.4 64.2 123.6 Acquisition-related costs 0.3 2.2 0.9 6.8 10.0 Integra