In This Article:
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Organic Growth: 8% in Q1 2025.
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Net Sales: SEK2.2 billion, with a 10% increase.
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Adjusted EBIT: SEK21 million, with an EBIT margin of 1.0%.
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Cash Flow from Operating Activities: Minus SEK103 million.
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Liquidity at End of Period: SEK418 million.
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Net Debt: SEK1.3 billion, with a net debt to LTM adjusted EBITDA ratio of 3.9 times.
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Acquisition-Related Liabilities: SEK349 million.
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Geographical Growth Drivers: Strong performance in Sweden, Germany, and Norway.
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Category Growth Drivers: Furniture, home decor, bathroom, and garden.
Release Date: April 25, 2025
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 (STU:7B1) reported a strong organic growth of 8% in Q1 2025, with all three business units showing growth.
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The company achieved a sixth consecutive quarter of profitability improvements year-on-year.
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Adjusted EBIT improved significantly, reporting SEK21 million at the group level, marking a substantial improvement from a small loss last year.
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The arbitration proceedings with IP-Agency were resolved in BHG's favor, resulting in a favorable financial outcome.
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BHG Group AB (STU:7B1) is well-positioned for future growth, having exited the restructuring phase and entering a phase focused on profitable growth.
Negative Points
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Cash flow from operating activities was negative at minus SEK103 million, following the normal seasonal pattern.
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The company's gross margin was not entirely satisfactory, affected by campaign pressure and mix effects, particularly in the Premium Living segment.
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There is increased market uncertainty due to geopolitical and financial unrest, which could impact consumer confidence.
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The company faces currency effects, with a stronger SEK negatively impacting the group as a whole.
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Despite strong top-line growth, the drop-through to earnings was lower than expected, with adjusted EBIT significantly below consensus estimates.
Q & A Highlights
Q: Solid organic growth in Q1, but the drop-through to earnings was lower than expected. Is the deviation due to the lower gross margin and FX? A: Gustaf Ohrn, CEO: The top line was strong, but gross margin was not as high as desired, particularly in Value Home and Premium Living. Campaign pressure and product mix, such as increased sales of lower-margin garden furniture, affected margins. FX also played a role. Overall, we're pleased with the results considering the improvements from the previous year.
Q: Your outlook seems more cautious, citing greater uncertainty. Have you seen any tangible changes in April? A: Gustaf Ohrn, CEO: We don't comment on sales specifics, but market uncertainty has increased due to geopolitical turmoil. While macro indicators like disposable income are positive, the overall market uncertainty remains a concern.