In This Article:
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Revenue: SEK2.7 billion, a decrease of 22% year-on-year.
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Organic Growth: -13.5% for the quarter.
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Earnings: Profit of SEK99 million for the quarter.
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Adjusted EBIT: SEK99.1 million, with an EBIT margin of 3.6%.
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Cash Flow: Positive cash flow of SEK328 million.
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Cash Conversion: Close to 170% for the quarter.
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Net Debt: SEK1.2 billion at the end of the quarter.
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Net Debt to EBITDA: 4.5x.
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Inventory Reduction: Reduced by almost SEK1.9 billion from peak levels in Q2 2022.
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Warehouse Space Reduction: Reduced by 18,000 square meters in Q2, with further reductions planned.
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Segment Performance: Home Improvement EBIT margin of 5.2%; Premium Living grew 6% outside Nordics.
Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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BHG Group AB (FRA:7B1) reported a profit of SEK99 million for the quarter, marking an improvement over the previous year.
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The company achieved a positive cash flow of SEK328 million with a cash conversion rate close to 170%, indicating strong financial management.
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BHG Group AB has successfully reduced its inventory by almost SEK1.9 billion over the past two years, positioning itself for improved profitability.
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The company is focusing on growth initiatives, including international expansion and category expansion, which are expected to drive future profitability.
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BHG Group AB is leveraging AI to drive efficiencies in content generation, customer service, and marketing, which could lead to cost reductions and improved customer satisfaction.
Negative Points
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Sales were down approximately 30% organically compared to the same quarter last year, indicating a challenging market environment.
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The demand in BHG Group AB's categories remains subdued due to high interest rates and low disposable income.
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The company anticipates a challenging market for the remainder of 2024, with a rebound not expected until 2025.
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BHG Group AB's net debt in relation to LTM adjusted EBITDA ended at 4.5x, which is relatively high.
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The company had to agree with auditors on a SEK99 million impairment of inventory, reflecting challenges in inventory management.
Q & A Highlights
Q: Given the weak market for outdoor furniture in Q2, what do you expect for the second half of 2024 in terms of category-specific campaign pressure and comparisons to Q2? A: We anticipate the market will remain challenging for the rest of the year, primarily due to low disposable income. However, if disposable income increases slightly, we might see some positive effects, especially in Home Improvement and Premium Living. Challenges persist in Value Home, but its impact is smaller in the latter half of the year. We remain cautious and plan for a tough market but are optimistic about a market rebound in 2025. - Gustaf Oehrn, CEO