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• Revenue Growth: Total sales increased by 2%, with organic growth at 0.5%.

• Adjusted EBIT: SEK107 million, nearly doubling from the previous year.

• Adjusted EBIT Margin: Improved to 3.7%.

• Cash Flow: SEK337 million with a cash conversion of 150%.

• SG&A Reduction: Over SEK400 million reduction in the past 12 months.

• Inventory Reduction: SEK2.1 billion reduction compared to peak levels.

• Net Debt: SEK1.0 billion at the end of the quarter.

• Net Sales: SEK2.9 billion for the quarter.

• Segment Performance: Home Improvement grew by 2%, Premium Living grew by 5%.

• Liquidity: SEK473 million at the end of the period.

• Interest-Bearing Liabilities Reduction: SEK2.2 billion reduction over the past two-and-a-half years.

• Warning! GuruFocus has detected 4 Warning Signs with STU:7B1.

Release Date: January 29, 2025

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 2% increase in total sales and 0.5% organic growth in Q4, marking a return to growth after a period of decline.

• The company achieved a significant improvement in earnings, with an adjusted EBIT of SEK107 million, nearly doubling the previous year's results.

• Cash flow was strong at SEK337 million, with a cash conversion rate of 150%, driven by successful Black Friday sales.

• BHG Group AB (STU:7B1) has reduced SG&A expenses by over SEK400 million and inventory by SEK2.1 billion over the past two years, strengthening its financial position.

• The company is in the final stages of a restructuring phase, having consolidated into fewer and larger platforms, which is expected to enhance scalability and efficiency.

Negative Points

• The market remains challenging, with significant geo-political uncertainties affecting recovery speed and potential setbacks.

• The Value Home segment continues to struggle, with availability issues due to aggressive inventory reductions impacting sales.

• Despite improvements, the company acknowledges that reaching a 5% EBIT margin in 2025 is a stretch goal, indicating potential challenges in achieving profitability targets.

• There are concerns about maintaining cost levels amidst a recovering market, which could impact the leverage from recent cost reductions.

• The German market remains challenging, and the company's expansion efforts there, such as opening a Nordic Nest store, may face difficulties.

Q & A Highlights

Q: Can you quantify the sequential trend in sales, particularly regarding Black Friday's impact? A: Gustaf Oehrn, CEO: The Black Friday period was strong, but overall, sales were fairly even throughout the quarter.