In This Article:
-
Net Sales: SEK2.4 billion, a decrease of 18% with an organic growth of -9.8%.
-
Adjusted EBIT: SEK52.5 million, corresponding to an EBIT margin of 2.2%.
-
Value Home EBIT Margin: Improved by 4.3 percentage points to 4.0%, amounting to almost SEK25 million.
-
Cash Flow from Operating Activities: SEK103 million.
-
Cash Conversion: 65%.
-
Net Debt: SEK1.2 billion, with a net debt to LTM adjusted EBITDA ratio of 4.6 times.
-
Liquidity at Hand: SEK267 million, with unutilized credit facilities of SEK800 million.
-
Inventory Reduction: From over SEK3 billion in Q2 2022 to approximately SEK1.3 billion.
-
Warehouse Footprint Reduction: Reduced by 23,000 square meters, aiming for a total reduction of 38,000 square meters.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
BHG Group AB (STU:7B1) reported a significant improvement in earnings, with a profit of SEK52 million in the second quarter, marking a SEK40 million increase compared to the same quarter last year.
-
The company achieved a positive cash flow of SEK103 million and a cash conversion rate of 65%, deviating from the usual negative cash flow pattern in the third quarter.
-
BHG Group AB (STU:7B1) has successfully reduced its inventory levels from a peak of over SEK3 billion in 2022 to approximately SEK1.3 billion, enabling a reduction in warehouse footprint.
-
The company has made progress in its international expansion, with the premium living segment growing by 11% outside of the Nordics.
-
BHG Group AB (STU:7B1) has improved its adjusted EBIT by SEK133 million on a rolling 12-month basis, demonstrating effective cost management and strategic initiatives.
Negative Points
-
Net sales decreased by 18% in the third quarter, with organic growth at minus 9.8%, indicating ongoing market challenges.
-
The market remains challenging, with a recovery not expected until the first half of 2025, particularly in markets like Finland and Norway.
-
Premium living segment experienced negative mixed effects, impacting gross margin and profitability negatively.
-
The company's net debt stands at SEK1.2 billion, with a net debt to LTM adjusted EBITDA ratio of 4.6 times, indicating a high level of leverage.
-
Interest costs, including a negative currency effect, amounted to SEK55 million, with a projected run rate of SEK150 million annually, posing a financial burden.
Q & A Highlights
Q: What is your view on the profitability impact from the Nordic Nest Warehouse Automation initiative? A: Gustaf Oehrn, CEO, explained that the automation initiative is expected to positively impact gross margins by reducing handling costs. The investment aims to support continued growth and improve efficiency, with the most significant efficiency gains anticipated during high-volume months. These gains will increase over time with higher volumes.