Byggmax Group Ab · OMXSTO:BMAX
Byggmax Group Ab — Investor Day (March 2021)
54 slides from Byggmax Group Ab's investor day presentation, Mar 23, 2021
Slide 1: Byggmax Digital Capital Markets Day
BYGGMAX DIGITAL CAPITAL MARKETS DAY 23 March 2021
Slide 2: Speakers
SPEAKERS MATTIAS ANKARBERG CEO Byggmax Group SANNA WESTMAN Head of Marketing Byggmax Group HELENA NATHHORST CFO Byggmax Group
Slide 3: Agenda
AGENDA Summary and updated targets Accelerating trends − Discount − e-com − Home Financials Way forward Q&A 3
Slide 4: Summary and Financial Targets
SUMMARY AND FINANCIALTARGETS | z
Slide 5: Everybody has the right to a fantastic home
EVERYBODY HAS THE RIGHT TO A FANTASTIC HOME Best price * Right assortment * Quick & easy * We care 5
Slide 6: Discount keeps growing
DISCOUNT KEEPS GROWING Change in number of stores Sweden +7% Other stores Discount stores -7% 6 Source: Svensk Handel, Byggmax consumer research
Slide 7: Byggmax in numbers
BYGGMAX IN NUMBERS 6.8 169 No 1 +29% BILLION SEK SALES 2020 BYGGMAX STORES 2020 PRICE PERCEPTION IN DIY SE/NO/FI SALES GROWTH 2020 4 MARKETS AND 20% No 1 +50% GROUP E-COM SHARE OF SALES 2020 SUSTAINABLE BRAND INDEX 2020 BYGGMAX E-COM SALES GROWTH 2020 2 SEGMENTS 7
Slide 8: Success story with new momentum
SUCCESS STORY WITH NEW MOMENTUM Sales, SEK bn 7 6 5 4 3 2 1 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Start (‘93) Rebrand Byggmax (‘99) Enter NO (‘07), FI (‘08) IPO (’10) Byggmax 2.0 Acquire Buildor (
Slide 9: Market share gains 2020
MARKET SHARE GAINS 2020 32 ─ Strong market boosted by “stay home” effect during covid-19 pandemic 20 19 ─ Recently published data on consumer DIY market in Sweden and Norway confirm Byggmax market share gain ─ Byggmax Group reported sales +29%, currency effect -3%-p. o Byggmax +29% o Skånska B. +25%
Slide 10: Old mishaps fixed
OLD MISHAPS FIXED Turn around Skånska Byggvaror ─ 10 consecutive quarters of profit growth Turn around Byggmax Finland ─ Now profitable and growing Upgrade tech platforms ─ Supply, ERP, POS, online Reduce net debt ─ Cut over 1/2 10
Slide 11: Growth in progress: Modern discount for today's DIYers
GROWTH IN PROGRESS Modern discount for today’s DIYers → Home improvement projects (not building materials) → Quality experience (not cheap) → Best of stores & e-com → Still lowest price! 11
Slide 12: More relevant for today's DIY-ers
MORE RELEVANT FOR TODAY’S DIY-ERS Lighting +50% Storage +40% Paint +40% Power tools +70% Hand tools +40% Garden +70% Garden +70% Stone +50% Electricity +40% Online excl. +90% buildings flooring 12 Note: sales development 2020
Slide 13: Own initiatives drive sales
OWN INITIATIVES DRIVE SALES Store upgrades e-com j = BYGGMAX 2 uP FORNYA HEMMET MED FARG Mila om med en testvinnare. +6% per “Store 3.0” +50% 2020 (+1%-p. impact 2020) (+3%-p. impact 2020) 13 New stores 10 new stores 2020 (+4%-p. impact 2020) BYGGMAX
Slide 14: Denmark entry and new initiatives add to potential
DENMARK ENTRY AND NEW INITIATIVES ADD TO POTENTIAL Denmark entry Byggmax Compact e-com growth Acquisition completed New store format New wave e-com efforts Byggmax as of Jan 2021 Launch 2022 Launch Q1-3 2021 14
Slide 15: SEK 4-5 bn sales potential from existing initiatives
SEK 4-5 BN SALES POTENTIAL FROM EXISTING INITIATIVES Store upgrades Store expansion e-commerce SEK ~3bn potential in proven Byggmax 100% 280 > 150 000 initiatives SEK 1-1.5bn from 169 169 Denmark, Compact and 39% next wave e-com + 50 000 Move towards – More stores – Upgraded stores 2020 Potential Q3
Slide 16: Updated financial targets
UPDATED FINANCIAL TARGETS Previous targets New targets 2019 2020 Sales +10-15% SEK 10bn 2025 5.3 bn 6.8 bn organic growth per year EBITA margin 7-8% 7-8% 5.4% 10.3% Net debt / - <2.5x 3.1x 0.6x EBITDA RTM EBITDA, ex. IFRS16 Dividend 50% 50% - 2.75 Share of net income SEK 1.16 proposal canceled in Bo
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Slide 18: Our mid term ambition
OUR MID TERM AMBITION 1. Drive profitable organic growth ─ Towards modern discount for today’s DIY-ers ─ Continue take market share in Nordic DIY ─ Combine best of stores and e-com 2. Generate significant cash & shareholder returns 3. Explore further growth opportunities connected to our core Byggma
Slide 19: Modern discount feels like premium
MODERN DISCOUNT FEELS LIKE PREMIUM New store 2017 New store 2019 Updated assortment * Higher quality perception * Still lowest price! 19
Slide 20: Everybody likes the upgrade
EVERYBODY LIKES THE UPGRADE +4 %-POINT BYGGMAX BRAND CONSIDERATION (TWO YEARS) +10 POINTS BYGGMAX NPS DEVELOPMENT (TWO YEARS) 20
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Slide 22: E-commerce +50% 2020
E-COMMERCE +50% 2020 – Everybody has the right to a fantastic home Best price * Right assortment Quick & easy * We care – Customer decides how & when to shop – Much progress last two years: new site, larger assortment, more delivery options – Byggmax e-com sales +50% 2020 22
Slide 23: Opportunity, not a threat
OPPORTUNITY, NOT A THREAT SKUs Store e-com + 1m – Wider assortment range 150 000 – Stores: for most common home improvement projects – e-com: for all home improvement + 50 000 projects – More customer segments Byggmax Bauhaus Home Depot (US) 23
Slide 24: Byggmax e-com at a glance
BYGGMAX E-COM AT A GLANCE Sales Orders AOV SEK 650m 239,000 SEK 2,700 +50% 2020 +72% 2020 -13% 2020 Profitable? – Clearly – Increasing – Below average 11% +50,000 50% share of Byggmax SKUs available of sales from online sales online exclusive assortment 24
Slide 25: Best customer offer
BEST CUSTOMER OFFER Product Price Site Deliveries Infrastructure Building a platform for quick & easy shopping of a wide assortment – at the best price 25
Slide 26: Delivery options drive sales
DELIVERY OPTIONS DRIVE SALES Orders Thousands Many new delivery options introduced 239 +72% last three years 43 3x – Express, chose day, flex – Parcel to pick up point 9 15x – Collect@store collect@store 139 New options meet new customer Small goods 15 1 needs and drive sales 144 +54% Home delivery
Slide 27: Building e-com physically
BUILDING E-COM PHYSICALLY dense infrastructure 169 multi-purpose stores 2020, in Sweden, Norway, Finland fulfillment center pick-up point 100% of heavy building materials shipped 3x collect@store growth 2020 from store showrooming customer acquisition 3x samples of online exclusive flooring +15% e-c
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Slide 29: Large Nordic DIY market
LARGE NORDIC DIY MARKET High Nordic DIY spend ─ High taxes & expensive craftsmen ─ Many own multiple houses ─ Long DIY tradition Nordic home improvement SEK ~300bn DIY for money and pleasure ─ Save money (67%) ─ Result is how I want it (37%) Nordic DIY ~120bn ─ It’s fun (36%) Nordic B2C building Nor
Slide 30: High involvement, changing behaviors
HIGH INVOLVEMENT, CHANGING BEHAVIORS 75% 70% Do the fun part - More small DIY projects - More DIFM for larger, more complex projects HAVE BUILT SOMETHING LIKE TO BUILD TO LAST YEAR (70%) CREATE A BETTER HOME FOR THEIR FAMILY Don’t fool me - Consumers source materials, also when using contractors 1/1
Slide 31: Niche position with trade and big box as main competitors
NICHE POSITION WITH TRADE AND BIG BOX AS MAIN COMPETITORS Building Home & materials Trade Big box Hardware + Online only interior B2B B2C B2C (+ B2B) B2C B2C − Service − Wide range – “one stop” − Stores in retail areas − Wide range − Lowest price − Competence and options − Wide home & hardware − Goo
Slide 32: Accelerating trends
ACCELERATING TRENDS 1. Home bigger role in consumers’ lives 2. Consumers spend on homes 3. New generation DIYers 4. Discount accelerating 5. E-com accelerating 32
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Slide 34: Financials
FINANCIALS • Growth initiatives • Cost efficiency • Financial position 34
Slide 35: Record sales growth & market share gain 2020
RECORD SALES GROWTH & MARKET SHARE GAIN 2020 New stores ~20% Market growth 2020 6.8 Billion SEK sales 2020 Market E-com ~32% Byggmax growth Upgrades 10 UNITS Increased Byggmax NPS (2 yrs.) 35
Slide 36: Proven initiatives for organic growth continue
PROVEN INITIATIVES FOR ORGANIC GROWTH CONTINUE STORE UPGRADES E-COMMERCE NEW STORES • 39% of store portfolio 2020 and • Scalable online business • Total potential of 280 stores in target 100% upgraded stores by existing markets end of 2023 • Strong momentum and high ambitions • Skewed opex and capex
Slide 37: Byggmax has the lowest opex in the industry
BYGGMAX HAS THE LOWEST OPEX IN THE INDUSTRY • Strong culture of cost consciousness in combination with our self-service store format generates lowest opex in the industry and enables profitability as discount player 37
Slide 38: Track record of efficiency improvement
TRACK RECORD OF EFFICIENCY IMPROVEMENT • We continuously invest in efficiency, generating savings through modernising the way we work, and upgrading technical platforms to keep efficient low cost organisation. LFL 27.8% • Our stores from 2016 show a flat opex trend despite inflation, LFL 4.5% rent i
Slide 39: Sales growth and scale effects
SALES GROWTH AND SCALE EFFECTS Full year Byg g max Gro up , SEK M 20 20 20 19 • 2020 net sales growth of 28.9%. Currency effect of - 3pp Net sales 6 801 5 277 Net sales YoY % 28.9% 3.3% To t al revenue 6 8 27 5 28 7 • Gross margin further strengthened +0.5pp vs last year’s all-time-high Co st o f g
Slide 40: Strong cash flow
STRONG CASH FLOW • 2016 – 2020 cash flow generated from operating activities amounted to SEK 1.9bn • The seasonal pattern expected to continue and to peak in Q2 • Cash flow from operating activities expected to remain strong 40
Slide 41: Headroom for further growth investments
HEADROOM FOR FURTHER GROWTH INVESTMENTS • Capex spend of SEK 800m last 5 years • Average annual capex SEK 160m, underlying maintenance capex low. Capex mainly driven by initiatives • We will continue to invest in proven growth initiatives • Upgrades • E-com • New stores 1m 4-6m 38m 160m CAPEX PER ST
Slide 42: Strong balance sheet
STRONG BALANCE SHEET • Strengthened balance sheet with a significant reduction in net debt • Net debt SEK 0.5bn Q4 2020 (SEK 1.2bn) • Net debt/EBITDA variation between 3.2x and 0.6x • Allows for operational flexibility, organic growth and dividend in line with financial target 42
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Slide 44: Everybody has the right to a fantastic home
EVERYBODY HAS THE RIGHT TO A FANTASTIC HOME Best price * Right assortment * Quick & easy * We care 44
Slide 45: In a good spot now
IN A GOOD SPOT NOW STRONG POSITION – Price leader – no 1 in Nordic hard DIY – Lowest cost operator in our industry – Successful both in stores and online – Favorable trends: discount, home, e-com – Strong balance sheet STRATEGY WORKS – Old mishaps fixed – “Modern discount” drives share gains – e-com
Slide 46: SEK 4-5 bn sales potential from existing initiatives
SEK 4-5 BN SALES POTENTIAL FROM EXISTING INITIATIVES Store upgrades Store expansion e-commerce SEK ~3bn potential in proven Byggmax 100% 280 > 150 000 initiatives SEK 1-1.5bn from 169 169 Denmark, Compact and 39% next wave e-com + 50 000 Move towards – More stores – Upgraded stores 2020 Potential Q3
Slide 47: Our mid term ambition
OUR MID TERM AMBITION 1. Drive profitable organic growth ─ Towards modern discount for today’s DIY-ers ─ Continue take market share in Nordic DIY ─ Combine best of stores and e-com 2. Generate significant cash & shareholder returns 3. Explore further growth opportunities connected to our core Byggma
Slide 48: New initiatives connected to our core business
NEW INITIATIVES CONNECTED TO OUR CORE BUSINESS Denmark entry Byggmax Compact e-com growth Acquisition completed New store format New wave e-com push Byggmax as of Jan 2021 Launch 2022 Launch Q1-Q3 2021 48
Slide 49: Denmark is a good fit
DENMARK IS A GOOD FIT Denmark – increased potential for organic growth and scale effects ─ Good size DIY market and good fit with Byggmax: price conscious consumers, good product overlap, competition we know ─ Possible to serve through Byggmax existing supply chain and warehouse structure ─ Entry th
Slide 50: Byggmax Compact – closer to customers' homes
BYGGMAX COMPACT – CLOSER TO CUSTOMERS’ HOMES All you need for the most common home improvement projects – Building materials… – Flooring, garden, paint, electricity, storage, tools, etc. Closer to customers’ homes – Retail parks – ca 4,000 sqm – All indoors possible – Still store + drive-in 50
Slide 51: Next wave of e-com growth
NEXT WAVE OF E-COM GROWTH Content Assortment Deliveries How-to-guides, instructions and shopping Add brands and private label (e.g., Full visibility on delivery status & Byggmax lists for +200 projects bathroom, garden furniture) proactively monitors First 80 projects launched end First new PL range
Slide 52: ... But what about sustainability?
… BUT WHAT ABOUT SUSTAINABILITY? – Byggmax combines low prices with high sustainability ambitions – Integrated in our operations and impacts what we do every day – Good development in several areas, and more to do 52
Slide 53: Updated financial targets
UPDATED FINANCIAL TARGETS Previous targets New targets 2019 2020 Sales +10-15% SEK 10bn 2025 5.3 bn 6.8 bn organic growth per year EBITA margin 7-8% 7-8% 5.4% 10.3% Net debt / - <2.5x 3.1x 0.6x EBITDA RTM EBITDA, ex. IFRS16 Dividend 50% 50% - 2.75 Share of net income SEK 1.16 proposal canceled in Bo
Slide 54: Investment case
INVESTMENT CASE 1. Byggmax is the discount leader in a lively and attractive DIY market ─ No 1 hard DIY discounter in the Nordics ─ Lowest cost operator in the industry ─ Home is more important and discount keeps growing 2. “Modern discount” drives share gains and profitable growth ─ Old mishaps fix