Bhg Group Ab · OMXSTO:BHG
Bhg Group Ab — Bygghemma Group — Q1 2018 Earnings Presentation
33 slides from Bhg Group Ab's earnings presentation, 2018
Slide 1: Record-breaking first quarter sales – organic growth of 15 percent
Q1 2018 RECORD-BREAKING FIRST QUARTER SALES – Organic growth of 15 percent Bygghemma Group First AB (publ) 1
Slide 2: Today's presenters
Q1 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
Q1 2018 Agenda § Results highlights § Business update § Financial update Q1 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary and financial targets § Q&A Bygghemma Group First AB (publ) 3
Slide 4: Agenda
Q1 2018 Agenda § Results highlights § Business update § Financial update Q1 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary and financial targets § Q&A Bygghemma Group First AB (publ) 4
Slide 5: Results highlights – strong start of 2018
Q1 2018 Results highlights – strong start of 2018 Strong sales growth: Increasing profitability: Strong operating cash flow: 53% growth of which 15% organic best first quarter to date outgrowing EBITDA Net sales (SEKm) Organic growth Adjusted EBITA (SEKm) Adjusted EBITA margin Q1 2018 (SEKm) Cash co
Slide 6: Agenda
Q1 2018 Agenda § Results highlights § Business update § Financial update Q1 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary and financial targets § Q&A Bygghemma Group First AB (publ) 6
Slide 7: Bygghemma Group at a glance
Q1 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% 3.9% 4.5% 4 774 4,419 CAGR +59% 2 768 2 604 Net sales (2017) 1 895 Denmark Norway 8% 5% 1 096 Home Finland DIY furnishing 17% 59% 41% 2014 2015 2016 2017 LTM
Slide 8: Our clear vision
Q1 2018 Our clear vision Unrivalled product offering The most competitive prices Make home The best online shopping improvement experience and expertise simple Bygghemma Group First AB (publ) 8
Slide 9: Proven, disruptive and winning model
Q1 2018 Proven, disruptive and winning model We offer an outstanding shopping experience through an online-first model 1. Unrivalled product 2. offering Real time price management 7. Winning 3. culture Traffic generation expertise 6. Agile and efficient delivery model 4. High service level in all 5.
Slide 10: Sizable Nordic market opportunity
Q1 2018 Sizable Nordic market opportunity We target large Nordic retail categories... ...with significant upside potential in online penetration Nordic retail market size by category in 2016 (SEKbn) Nordic online penetration by category (2016) Food and drink 798 Books 50% Apparel and footwear 244 Co
Slide 11: Increasing online penetration drives future growth
Q1 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) SEK ~10bn @ 15% online penet
Slide 12: Q1 market development supports the online trend
Q1 2018 Q1 market development supports the online trend § Management estimates improved market shares in both Significant outperformance of the online market segments during Q1 2018 Q1 2018 § Swedish DIY operations grew steadily during the period, mainly driven by continued online penetration 53,1%
Slide 13: Integration of Furniturebox according to plan
Q1 2018 Integration of Furniturebox according to plan § Furniturebox was acquired in Q1 2017 to gain a leading Furniturebox integration is close to final and on track position in the Nordic online home furnishing segment § The integration project was initiated in Q2 2017 for the purpose of realising
Slide 14: Agenda
Q1 2018 Agenda § Results highlights § Business update § Financial update Q1 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary and financial targets § Q&A Bygghemma Group First AB (publ) 14
Slide 15: Strong net sales growth
Group Q1 2018 Strong net sales growth Strong development in KPIs Strong growth despite the unusually late arrival of spring – Average order value distorted by recent M&A and the cold weather, particularly in March Net sales (SEKm) Organic growth +38% # of visits 18 320 25 355 (000’s) Q1 2017 Q1 2018
Slide 16: Increased underlying profitability – all time high for Q1
Group Q1 2018 Increased underlying profitability – all time high for Q1 Adjusted gross profit increased by 61% compared to the Improved EBITA margin: same period last year, indicating scalability operating leverage partly offset by cold weather Adjusted gross margin SEKm Adjusted EBITA margin +1.1 p
Slide 17: DIY segment: organic growth of 18% and increased profitability
DIY segment Q1 2018 Organic growth of 18% and increased profitability DIY represented 59% of § Net sales increased by 52.8%, of which the Group’s net sales in Q1 2018 Operating leverage from further scale organic growth accounted for 17.8% § Adjusted EBITA increased to 3.3% (2.5) Net sales (SEKm) Ad
Slide 18: Home furnishing segment: organic growth of 9% despite cold weather
Home furnishing segment Q1 2018 Organic growth of 9% despite cold weather Home furnishing represented 41% of Significantly lower sales of outdoor § Net sales increased by 53.2%, of which the Group’s net sales in Q1 2018 products impacted margin organic growth accounted for 8.8%, despite being advers
Slide 19: Strong operating cash flow: outgrowing EBITDA
Cash flow and financial position Q1 2018 Strong operating cash flow: outgrowing EBITDA Strong cash conversion despite inventory increase of Cash flow for the period was distorted by items affecting SEK +78m to prepare for Q2 / Q3 sales comparability and the new share issue at IPO Q1 2018 (SEKm) Cash
Slide 20: Net debt / EBITDA in line with the financial target
Cash flow and financial position Q1 2018 Net debt / EBITDA in line with the financial target Materially improved financial position following the IPO § Materially reduced net debt and interest expense following the new share issue and refinancing in connection with the IPO SEKm 31 Mar 2018 § Debt re
Slide 21: Agenda
Q1 2018 Agenda § Results highlights § Business update § Financial update Q1 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary and financial targets § Q&A Bygghemma Group First AB (publ) 21
Slide 22: Summary
Q1 2018 Summary § Strong net sales growth in the quarter, total of +53% of which +15% organic growth § Continued online penetration in Bygghemma Group’s markets and management assesses improved market shares in both segments in the quarter § The highest gross margin and EBITA margin for a first quar
Slide 23: Financial targets and dividend policy
Q1 2018 Financial targets and dividend policy ü Bygghemma Group aims to grow net sales by 20 – 25% on average per year in Net sales the medium term, of which approximately 15% attributable to organic growth growth ü The Company’s objective is to reach net sales of SEK 10 billion in the medium term i
Slide 24: Agenda
Q1 2018 Agenda § Results highlights § Business update § Financial update Q1 2018 ‒ Group ‒ DIY segment ‒ Home furnishing segment ‒ Cash flow and financial position § Summary and financial targets § Q&A Bygghemma Group First AB (publ) 24
Slide 25: Why Bygghemma Group
Q1 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 leader with strong profitable growth potential ~100% growth is expected in the online channel of the home improvement market until 2020E C
Slide 26: Appendix
Q1 2018 Appendix Bygghemma First Holding AB 26
Slide 27: Condensed consolidated financial information
Q1 2018 Condensed consolidated financial information Q1 Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2017 Net Sales 1,025.1 669.7 53.1 3,955.5 Gross profit 213.1 132.0 61.4 820.0 Gross margin (%) 20.8 19.7 5.5 20.7 Adjusted gross profit* 220.6 134.6 63.9 855.2 Adjusted gross margin (%) 21.5 2
Slide 28: DIY segment
Q1 2018 DIY segment Q1 Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2017 Net Sales 607.2 397.3 52.8 2,342.2 Gross profit 123.6 73.8 67.6 468.4 Gross margin (%) 20.4 18.6 9.6 20.0 Adjusted gross profit 123.6 73.8 67.6 468.4 Adjusted gross margin (%) 20.4 18.6 9.6 20.0 Adjusted EBITA 20.3 9.8 1
Slide 29: Home furnishing segment
Q1 2018 Home furnishing segment Q1 Jan-Dec SEKm (if not otherwise stated) 2018 2017 ∆% 2017 Net Sales 421.6 275.1 53.2 1,628.9 Gross profit 90.3 58.3 55.0 354.0 Gross margin (%) 21.4 21.2 1.2 21.7 Adjusted gross profit 97.8 60.9 60.7 389.2 Adjusted gross margin (%) 23.2 22.1 4.9 23.9 Adjusted EBITA
Slide 30: P&L
Q1 2018 P&L Q1 Jan-Dec SEKm 2018 2017 2017 Net Sales 1,025.1 669.7 3,955.5 Other operating income - - 6.1 Total Net Sales 1,025.1 669.7 3,961.7 Cost of goods sold -812.0 -537.6 -3,135.6 Personnel costs -106.6 -53.5 -306.2 Other external costs and operating expenses -117.0 -62.3 -373.5 Other operatin
Slide 31: Balance sheet
Q1 2018 Balance sheet 31 Mar 31 dec SEKm 2018 2017 2017 Non-current assets Goodwill 2,455.8 2,217.9 2,451.1 Other intangible fixed assets 1,162.7 998.9 1,166.3 Total intangible fixed assets 3,618.5 3,216.8 3,617.4 Buildings and land 11.2 10.7 10.8 Tangible fixed assets 22.9 16.3 21.4 Financial fixed
Slide 32: Consolidated statement of cash flows
Q1 2018 Consolidated statement of cash flows Q1 Jan-Dec SEKm 2018 2017 2017 Cash flow from operating activities before changes in -41.8 1.6 67.3 working capital Changes in working capital 23.9 -28.2 73.7 Cash flow from operations -18.0 -26.6 141.1 Investments in operations -12.0 -538.6 -731.7 Invest
Slide 33: Reconciliation on non-IFRS metrics
Q1 2018 Reconciliation on non-IFRS metrics Q1 Jan-Dec SEKm 2018 2017 2017 Operating income -29.2 5.6 91.5 Depreciation and amortization of intangible fixed assets 9.3 6.7 32.1 EBITA -19.9 12.3 123.6 Acquisition-related costs 0.6 4.6 10.0 Integration costs 7.9 2.6 44.7 Costs related to LTIP 11.4 - -