BHG Group AB (publ)

Thank you, operator, and good morning, everyone. Moving to slide two, please. 2020 was a year like no other for BHG, and 2021 has started in a similar vein, with continued strong organic growth and with very strong performances in recently acquired businesses. Last quarter, we updated our financial targets, including the target to double our net sales once again over the medium term. The first quarter of 2021 with total growth of 58% and perform organic growth of 43 percent clearly shows the progress we continue to make along this path slide three please today we'll start by reviewing the results highlights then move on to the business updates i'll then hand it over to jesper to cover the financial updates before i summarize and we launch in to the q a session on to the highlights then slide five please Growth accelerated further compared to the already strong third and fourth quarters of 2021. Total growth amounted to 58%, organic growth to 37%, and pro forma organic growth to 43%. The pro forma organic growth number shows both the importance of NordicNest, our largest acquisition to date, and the continued stellar performance of the business. Net sales reached 2.6 billion SEK. Adjusted EBIT came in at 184 million SEC, corresponding to an adjusted EBIT margin of 7.2%. And cash flow from operating activities amounted to 120 million SEC, despite Q1 typically not being a strong quarter for cash flow because of seasonality. Our performance shows that consumer interest in home improvement remained high, but also that the accelerated shift towards the online channel has continued. In a strong overall market, which we believe grew by around 10%, BHG took significant further market share. Both segments performed well. The whole furnishing segment was further boosted by the inclusion of Nordic Nest, as well as strong growth in our Eastern European markets. The DIY segment continued on its accelerated path with strong trading in all units, including our large Swedish and Finnish platforms, and quite exceptional trading by our private label and own brand businesses. It's always difficult to look into the future. Forecasters' crystal balls are probably especially opaque in our world of today. Near-term uncertainties include how consumer confidence will be impacted by stimulus packages, interest rates, and housing prices. Further compounding the picture are the disruptions that have arisen in global supply chains. Despite these uncertainties, our strong online foundation makes us confident that we will face favorable growth conditions also going forward. Slide 16. We continue approaching growth through a mix of organic initiatives and M&A. When it comes to the organic component, we're now reporting our sixth quarter in a row with growth above the 15% level, our communicated target over a business cycle. Again, with the 37% organic growth this past quarter and 43%, including Nordic Nest, on a pro forma basis, Q1 saw further acceleration on the past two excellent quarters. Slide seven, please. Our strategy remains focused on our four cornerstones. Firstly, the continued expansion of our leading product range, which now exceeds the millionth Q mark. Secondly, scale and the high share of own brands in our sales mix. With the quarter's growth of 58% and LTM growth of 50%, not least fueled by our product label range, we continue building scale advantages. Thirdly, creating the most appealing shopping experience and leading in the digital realm. We continue growing our digital footprint significantly in the quarter. resulting in visits to our destinations exceeding 100 million. And finally, offering the market's best professional guidance, service, and support, including in the quarter, further extending the reach of our installation network within DIY, as well as our own last mile delivery capabilities on the home furnishing side. This is our ecosystem with the product offering at its base and the customer always at the center. And finally, an integral part of our execution approach includes leveraging our M&A capabilities to accelerate both growth and strategy execution. Moving on to the business update, I'm turning to slide nine. As we enter our ninth year since inception, some key metrics describing who we are today at a glance. On the left-hand side, our CAGR since 2014 exceeds 40%. In this period, EBITDA has gone by more than 100% per annum. Our EBIT margin on an LTN basis stands at 8.1% and is generated by over 100 customer-facing web companies. Now moving over to the right-hand side, these web shops have been visited well over 300 million times in the past 12 months, generating some 3.6 million orders from customers in 24 countries. And finally, our leading product portfolio keeps expanding. Slide 10, please. We announced three acquisitions in the quarter, which all contribute to one or more of the four strategic cornerstones we just reviewed. A common feature of both acquisitions in the DIY segment is that they will drive our continued development towards a higher share of proprietary brands. IP agencies strength life in its private label assortment in the ledger segment, already an important complement to our large DIY platforms. Hoffa Bathroom Group brings three strong brands to the bathroom segment, Hoffa, Novo, and Vestibice. These brands complement our own Bathlife brand. Through Hoffa Boston Group, we have also added a team that has a long history of building strong brands with a clear long-term position in the market. The acquisition of Svensson i Lammhult was a logical continuation after Nordic Nest became part of BHG and will strengthen our position in the premium segment with one of the strongest destination brands in the Swedish market and a portfolio of very strong external product brands. After raising 1.6 billion TEC through a directed share issue in February, we are in a very strong position to continue driving growth, both through organic initiatives and by complementing these with acquisitions, opportunities for which are plentiful. Looking a little deeper at expansion opportunities and moving to slide 11, please. Our growth can be described along two vectors, both of product assortment and geography. Our assortment has expanded continuously, both in terms of the breadth and the depth of the categories that we serve with our customers' homes at the center. Starting with the home furnishing segment, we continue driving assortment expansion within our current categories, ranging from large and bulky furniture over to the lighting, tabletops, and smaller items side of the spectrum. Turning to the DIY segment, much of the focus in terms of recent expansion has been on driving our proprietary brands In addition, we have also added to the verticals that we serve. The leisure vertical is one fast-growing example which sits well with core DIY categories such as doors and windows, bathroom, flooring, garden, etc. Again, the home environment forms the base, but being customer-centric, we're also prepared to step into adjacent verticals which resonate with our target customers. Turning to the other vector, rather geography, our main focus until quite recently has been on our Nordic home markets. Since the second half of 2018, we're also present in a number of fast-growing Eastern European markets. And now, with Nordic Nest, we've also in earnest expanded our presence into additional large markets, such as, for instance, Germany. Our current geographic base provides fertile ground for continued expansion. Within DIY, we are primarily focusing on extending the geographic reach of our private label businesses by taking them pan-Nordic, as well as selectively entering mainland EU markets. Within the home furnishing segment, we see clear geographic acceleration opportunities in the Nordics, in Eastern Europe, and now the rest of Europe. But Germany actually hadn't surpassed Norway as Nordic Nest's second largest market in the quarter. Summing up, we continue to pursue growth along the assortment and geography vectors and remain committed to M&A as a key accelerant of growth and strategy execution. Moving on to slide 12, please. While continuing our journey of building BHG for sustainable, profitable, cash-generating growth, we're also step-by-step professionalizing our approach to ESG. 2020 saw significant progress in this regard, with our first-ever full stakeholder influence materiality analysis helping us define what sustainability means more specifically for us, with the categories we serve and the business model that we deploy. We then carried out a review of our growing universe of units, implemented the process for consistent data collection, and released our first sustainability report consistent with the GRI standards. And as recently as last week, we received our first ESG rating from MSCI. The MSCI A rating is now our external baseline benchmark against which we will measure our progress. The foundation is in place, and as we announced in this past quarter, we're adding a new role to the executive management team. Maria Marine is joining us on August 1st to head up HR communications and ESG, three critical and interwoven areas. Moving on to slide 13, please. Our business model combines a multi-brand approach with acquisitions, both of which help maximize our digital footprint and result in a customer base that is both broad and attractive. As you can see to the left in this picture, we've seen strong growth in active customers, defined as customers who have made at least one purchase in the past 12 months. Over the past five quarters, our active customer base has gone by 67% and has now reached the 3 million mark. The number of new customers in the first quarter grew by more than 80% on a pro forma basis, on the back of strong organic growth, as well as excellent growth in recently acquired businesses. Despite this steep growth in new customers, we maintained a relatively stable share of repeat orders at around 40% of the total. Our customers place on average 1.3 orders per annum as our product assortment is dominated by consumer durables. Our approach to digital marketing and traffic generation results in an excellent return on advertising spend with sound first order profitability and a marketing ROI well over 3x. We took important steps in the quarter of charting the path to further unlocking insights from customer-related data across the group and to get consistent processes and measurements in place also for the more recently acquired businesses. We're convinced that investments into this area will help unlock further profitable cash generating growth for the group. This is a key focus area for management, along with the other steps we're taking to continue enhancing the customer experience. I'll now hand it over to Jesper, who will walk us through the financials in more detail. Over to you, Jesper. Thank you, Adam.

Our rapid development continued in the first quarter, with strong performance by both our segments. The quarter was characterized by strong, profitable, and cash-generating growth, including a solid performance by NordicNet. As Ada mentioned, net sales increased 57.7% to reach 2.568 million SEK For former organic growth reached 42.7% and organic growth reached 36.5%. The top line development coupled with cross-margin improvement and discipline on the SG&A line resulted in the highest first quarter EBIT and EBIT margin to date. EBIT amounted to 183.7 million SEX which corresponds to an EBIT margin of 7.2%. As in recent quarters, the high adjusted EBIT margin was the result of a favorable price and product mix, including the continuously growing private label share of sales in the due-to-sales segment, as well as the good operational leverage due to high growth. Moving on to slide 16. Turning to some of the sales drivers in the quarter. The continued strong trading conditions led to a strong growth in the number of visits to the group's destinations, which increased by 74% to 101 million during the quarter and generated 1.1 million orders. Despite a strong trend in terms of the number of visitors to the group's destinations, with performer growth of 51%, the conversion rate increased, The lower overall AOV level in the period was attributable to shifts in mix towards more package shipments, resulting from the consolidation of Nordic Nest on January 1st. The gross margin for the quarter of 27.2% equaled the record from the preceding quarter and demonstrates that an advantageous AOV structure could be maintained in the relation to the delivery options relevant to a given category. Slide 17, please. On the back of continued strong market conditions, the first quarter of the year enjoyed a nicely leveraged P&L. Strong top-line growth at 57.7% resulted in strong operating leverage translating to a gross margin increase of 66.3% and an EBIT increase exceeding 100%. The gross margin improved by 1.4 percentage points to reach the record-breaking level of 27.2% from last quarter. The product margin amounts to 39.7%. Just as in the second half of 2020, the gross margin improvement was driven by 1. A growing share of sales from our own brand. Continued focus on maintaining the price points for bulky products. Three, additional cost and process efficiencies in purchasing and logistics, partly as a result of the high volumes. And four, positive net effects from the stronger SEC, resulting in a favorable impact on the EBIT margin by 0.9 percentage points. Let us now turn to our do-it-yourself segment. Slide 18, please. The do-it-yourself segment started the year in the same way it ended the preceding year. with strong growth and favorable profitability. Net sales grew by 47.6% to reach 1.389 million SEK, of which organic growth amounts to 44.8%. The various areas of the segment performed in line with recent quarters favorable growth in the large Swedish and Finnish platforms and exceptionally strong growth in the Danish operations as well as the operations that supply our own brand. profitability in the due-to-sale segment was once again favorably impacted by a high share of sales from our own brand. The gross margin improved by 3.0 percentage points to reach the record high level of 25.7% and adjusted EBIT a month to 108 million SEK, corresponding to an EBIT margin of 7.8%. During the quarter, we continued to develop our custom offering including the continuous expansion of the product range, expanding the base of products for which consolidated deliveries offer, and a further roll-out of installation services. The installation platform has now been established in the Finnish market, and the number of installations grew quickly during the quarter. Slide 19, please. The home furnishing segment reported a very strong quarter, with favor of organic development, and exceptionally strong growth in recently acquired NordicNest. Net sales in the home furnishings segment grew by 70.6% in the quarter, reaching 1.185 million SEK, of which organic growth amounts to 25.4%, and pro forma organic growth, including NordicNest, amounts to 41.5%. Net sales were strong in all geographic markets, with the highest growth reported by NordicNet, the category specialist Lampgallerien, and the Eastern European operation FurnitureOne. The gross margin for the quarter was 28.9%. Adjusted EBIT amounted to 89 million SEK, corresponding to an EBIT margin of 7.5%. The slightly lower gross margin compared with the year earlier period is mainly attributable to two factors, a mixed effect from NordicNet, which has a slightly lower gross margin than the segment other operations, and effects from the Danish furniture operations, which in turn were the result of the establishment of a new warehouse during the quarter, as well as the strict coronavirus restrictions in Denmark in January and February. Finally, the stronger SEC rates during the period had a positive impact on EBIT, corresponding to approximately 1.3 percentage points. Let's turn to cash flow. Slide 20, please. Cash flow from operating activities amounts to 120 million SEC, corresponding to a cash conversion in relation to adjusted EBITDA of 48.8%. The increase in working capital in the period is mainly attributable to the high demand in the preceding quarter through an outflow of supplier payments and the fact that the group has chosen to accept a slightly higher inventory level ahead of the outdoor season that has just begun. The right-hand graph showing the development in liquidity walks us through the starting period position of 299 million SEK adding the cash flow from operations, deducting the impact of investing activities, a majority of which is M&A related, and finally, the financing activities, which are primarily related to the share issues completed in the period, but also include amortization of leasing liability, bringing us to the period end, 1.9 billion SEK of liquidity at hand. Slide 21, please. The group's net debt amounted to 174 million SEK at the end of the quarter, completed a directed share issue and strong operating performance meant that net debt in relation to LTM-adjusted EBITDA ended at 0.2 times, a significant outperformance of the medium-term financial target range. On top of our liquidity at hand, we had unutilized credit facilities at the end of the quarter of 240 million SEK. We continue to see excellent M&A opportunities, and the funds we raise through the directed share issue fully reset our capacity to act decisively as the right opportunities materialize. Handing it back over to you, Adam, to summarize and conclude. Thank you, Jesper.

Slide 23, please. We're now a third of the way into the second quarter and are facing the very strong comps from last year when demand took off in earnest. As we write in today's report, after a full year of growth that was decidedly higher than the normal trend, it's difficult to predict how long this elevated level of demand will continue. However, so far so good, as they say. We believe that a new level of online penetration has been established and that the prospects for the home category served by us remain bright. Summarizing the quarter, we're off to a very strong start to the year. Growth accelerated further on the strong third and fourth quarters of last year and marks the sixth quarter in a row with above target growth. We've kept a high M&A pace with three strategic fault zones announced in the quarter. Our gross and bottom line margins are at industry-leading levels on the back of the sound mix development and strong operational control. Strategy execution is in motion, revolving around our four pillars, which make up the BHG ecosystem. And finally, as we announced updated financial targets in conjunction with the Q4 report, Q1 marks the first quarter of the new leg of our journey, a journey in which we are going for doubling in size again to reach 20 billion second net sales in the medium term, and a journey which is now off to an excellent start. This concludes our presentation, and we will now open up the call for questions.