BHG Group AB (publ)

Thank you, operator, and good morning, everyone. Moving to slide two, please. We continue to grow in the quarter on the back of our special BHG recipe, combining organic initiatives with M&A and unlocking the synergies made possible. Through this recipe, our position was reinforced, and we continue to make progress towards becoming the undisputed European online leader within home improvement. Slide three, please. I'll start this morning's presentation by reviewing the results highlights and then move on to the business updates. Jesper will then cover the financial updates before I conclude and we launch into the Q&A session. And slide four. And on to slide five, please, for the results highlights. Despite challenging comps, we delivered another quarter of growth with net sales of 3.1 billion, up 33.6%, corresponding to perform organic growth of 10.2% and organic growth of 5.5%. Adjusted EBIT amounted to 164 million, corresponding to an adjusted EBIT margin of 5.4%. And cash flow from operating activity at minus 232 million was significantly affected by the disruptions to the global supply chains, which, among other things, have led us to accept help then. Despite challenging comps, we delivered another quarter of growth with net sales of 3.1 billion, up 33.6%, corresponding to perform organic growth of 10.2%, and organic growth of 5.5%. Adjusted EBITs amounted to 164 million, corresponding to an adjusted EBIT margin of 5.4%, and cash flow from operating activities at minus 232 million was significantly affected. by the disruptions to the global supply chains, which, among other things, have led us to accept higher inventory levels for now. The past quarter is the first in which we operate in a fully post-COVID environment, affecting supply, but also demand. Nevertheless, we strengthened our leading position. I'm pleased with the fact that our units outgrew the market significantly, and I'm also pleased with the continued strong performance of our recently acquired businesses. Two key acquisitions, one for each segment, were also carried out during the period. FEMA, our second largest acquisition to date, and AH Trading, our first ever acquisition in Germany. Slide 60. As you well know, our growth journey is fueled by a mix of organic initiatives and M&A. An approach we are convinced conveys unique advantages for us. When it comes to the organic component, we did quite okay in the quarter, given the tough comps and the decline in the overall market. Organic growth amounted to 5.5%, driven by the DIY segment, and pro forma organic growth to a whisker over 10%, with both segments at similar levels. Slide 7, please. In a quarter, we saw our underlying markets contract, and with bottlenecks and price increases in the supply chain persisting, our units gained market share. In addition, we added new units under our umbrella, leading to total growth in excess of 30%. As I've already mentioned, the new additions to the group have performed well. Further, our still nascent position on the European continent was significantly strengthened. As you can see in the chart to the right, net sales on the continent accounted for 13% of the total and within the home furnishing segment to a full 30%, a significant increase on as recently a couple of years ago. We continue to be bullish about the further organic and M&A related opportunities in our traditional Nordic home markets, as well as on the European continent. And finally, we reaffirm that the underlying online expansion trajectory, in our view, remains unchanged. The pandemic simply accelerated the path, and from this higher base, we expect the online home improvement markets to expand by 15% per annum over a cycle for many years yet to come. As the natural industrial consolidator of our space, we have the full toolkit available to continue docking excellent new businesses to the BHG mothership. Slide eight. For a reminder on our total addressable market opportunity. Today, we are the number one of the Nordics. And as we just discussed, we also have a rapidly growing presence on the European continent. Jointly, these markets represent a very significant growth opportunity. Our performer net sales is approaching 14 billion SEC. This should be viewed against the backdrop of a Nordic online market for home improvement worth some 35 billion SEK, which in turn forms part of the total addressable market in the Nordics worth some 300 billion SEK, which finally, of course, is dwarfed by the 15 to 20 times larger European opportunities. With online penetration standing at around 14%, but increasing steadily, the bulk of the growth and the total addressable market will continue to accrue to the online segment for many years to come. It's against this market backdrop that we updated our mid-term financial targets earlier this year, including us setting out to again double the size of our business and become a 20 billion SEK sales company. Slide nine, please. Moving to the business updates, so slide 10, please. Our strategy remains focused on our four cornerstones, which I trust that those of you who have followed us for a while know by heart by now. Firstly, a continued expansion of our leading product range. Secondly, scale and a high share of own brands in our sales mix. Thirdly, creating the most appealing shopping experience and leading in the digital realm. And finally, offering the market's most professional guidance, service and support. The product offering forms the base of our ecosystem and the customers fit at its center. And an integral part of our execution approach includes leveraging our M&A capabilities to accelerate both growth and strategy execution. Slide 11. Again, our recipe combines organic initiatives and M&A with the synergy possibilities created between the two. The organic approach is based on our four strategic pillars, which we just reviewed. In addition to benefiting from the secular trend of rising online penetration, we continue adding product categories and geographies. We also continue improving our approach to M&A. We have the proven track record, we have the organization capability, and we have the deal flow. Our markets are still fragmented. This is true for the Nordics, but also applies perhaps to an even greater extent to the European continent. And we continue refining our post-merger integration playbook to ensure we capture synergy in a structured and repeatable fashion. We fine-tuned how we go about integrating the bolt-ons onto our platforms and a model for how the group ensures clear governance processes, centers of excellence, and how to optimize tech, data, and automation across our units. Moving to slide 12, please, for a quick status update on the post-merger integration slide in reverse chronological order. Our most recent acquisition, that of ADH Trading, is already in deep discussions with its new partners within our home furnishing segment. One great milestone was reached as recently as last week, when a truck from our Helsingborg warehouse was dispatched to the EH Trading warehouse in Northland, Westfalen. The other completed acquisition in the third quarter, Hema, is already experimenting with assortment exchange between various relevant BHG units. Further, cost synergies, primarily revolving around product and delivery partners, are in execution. IP Agency, our Finnish private label acquisition, It is now operating as part of the BHG Finland team and much of new product development centers around ranges that fit particularly well into the various BHG sales channels. Hoffa Bathroom Group is forming our new base for a significant chunk of our proprietary grants within DIY with a focus on the bathroom category and adjacency. This includes leveraging the Hoffa management team and warehousing infrastructure. And finally, Nordic Nest and Sensons are essentially already operating as one. under the Nordic Nest management. The Nordic Nest warehouse is expanding to meet the good growth of the business, but also in order to allow moving the former Svensson's warehouse into the Nordic Nest one. We've also decided to automate a very large part of the Nordic Nest warehouse. This project is kicking off now, will run through next year, and is set to drive significant efficiency gains. Turning to slide 13, and a look at organic initiatives. which are sorted under the key themes, assortment, delivery, and data slash automation. We continue to expand our assortment, and we continue to grow our installation businesses in support of our mission, we make living easy. A number of our units are now operating in our proprietary system for automated product data exchange, and we're clustering our units to reduce complexity, including, as I just mentioned, consolidating a number of our own brands into the newly acquired Hossa Bottom Group. We are making significant investments into delivery. Within the DIY segment, these include bolstering our dropshipping capabilities to meet ever-rising customer expectations. Within the home furnishing segment, these are focused on consolidating warehousing infrastructure and expanding our showroom and last-mile delivery footprint. And on the data and automation side, we have embarked on upgrading our customer platform as well as automating parts of our warehousing infrastructure. turning to slide 14 for an update on key customer metrics. Net sales growth was, of course, an outcome of our expanding customer footprint. Although traffic generation conditions were more challenging in the quarter than in the preceding 18 months, our customer base continued to grow and our customer metrics improved. As you can see to the left on this slide, the increase in active customers defined as customers who've made at least one purchase in the past 12 months amounting to 32%, and surpassed the 4 million mark. We succeeded in driving both the number of orders per customer and the share of net sales from repeat customers up, and we maintained an attractive marketing ROI. Our investments into gaining further insights from customer-related data across the group continue. The work to launch an upgraded customer data platform for select large units in the first half of 2022 is progressing well. These efforts will help drive customer lifetime value up, and so unlock further profitable goals. More generally, driving BHG towards a higher level of customer centricity remains a key focus area for group management. Slide 15, please. This is BHG today at a glance. On the left-hand side, our CAGR since 2014 exceeds 40%. In this period, EBIT has grown by more than 100% per annum. Our EBIT margin on an LTM basis stands at 7.1%. and is generated by over 100 customer-facing web properties. And now moving over to the right-hand side, these web shops have been visited over 318 million times in the past 12 months, generating some 4.5 million orders from customers in 24 countries. And finally, our leading product portfolio has now reached 1.5 million views. Slide 16, please. Handing it over to Jesper, who will walk us through the financial update. Slide 17, please.

Thank you, Adam. With the third quarter behind us, we can conclude that BHG remains strong in a post-COVID environment, thanks to our position in the whole market and the potential we have started to realize in continental Europe. As Adam mentioned, net sales increased 33.6% to reach 3.060 million SEK, Proforma organic growth reached 10.2%, and organic growth reached 5.5%. Organic growth was impacted by high comps and a sluggish home furnishing segment, particularly at the beginning of the quarter. Adjusted EBIT amounts to 164 million SEK, corresponding to an EBIT margin of 5.4%. Let us now turn to slide 18. and a closer look at our EBIT margin compared to last year. Comparing our EBIT margin in the quarter to last year, we can conclude that the Q3 2020 EBIT margin of 8.5% is a tough comparison as it was favorably affected by COVID-related market factors. Our product margin amounted to 38.3% in the quarter, almost one percentage point higher than last year, The negative impact from increases in supplier prices and freight rates was mitigated by significant price increases and mixed improvements. Fulfillment costs increased in the quarter compared to last year, driven by supply disruptions, longer lead times and our decision to accept higher inventory levels for now to ensure product availability. Marketing costs increased in the quarter as we, like the rest of the market, were faced with increases in cost per click and tougher competition for customers. The increase in organizational costs should be seen in the light of under-resourcing in previous periods and continued long-term investments to drive customer centricity. Finally, the increase in depreciation and amortization was primarily driven by continued tech investments. All in all, our EBIT margin amounts to 5.4% in the third quarter. Let us now turn to our due-to-sale segment, slide 19, please. The due-to-sale segment reported a solid quarter given challenging comps and us now operating in a post-COVID environment. Net sales grew by 27.2% to reach 1.862 million SEK, of which organic growth amounts to 10.1%. As in the second quarter, the segment Swedish operations performed particularly well, including the Big Hema platform and the specialist unit focusing on our own brand. The gross margin in the due-to-sale segment was once again favorably impacted by a high share of sales from our own brand and improved by 0.2% to reach 23.3%. adjusted EBIT amounts to 129 million SEK, corresponding to an EBIT margin of 7.0%. Slide 20, please. The home furnishing segment continues to build critical mass by combining organic initiatives and acquisition, including our entry into the large German market. At the same time, high comps, a weaker total market, and complications in the global logistics chain resulted in a weak organic growth. Nest sales in the home furnishing segment grew by 44.6% in the quarter, reaching 1.206 million SEK, of which organic growth amounted to minus 2.4%, and pro-form organic growth amounted to 11.1%. The gross margin for the quarter was 29.3%. Adjusted EBIT amounted to 49 million SEK, corresponding to a needed margin of 4.0%. The lower margin compared with the year earlier period is mainly attributable to three factors. Complications in the supply and logistics chain, cost increases for online marketing due to weaker demand, and the fact that consumer price adjustments have yet to fully offset cost increases. Let's turn to cash flow, slide 21, please. Cash flow from operating activities amounts to minus 232 million SEK and was mainly impacted by the build-up of inventories to ensure high product availability to counter the disruptions in the global supply chain. 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 Q1 and the refinancing completed in Q2, but also include amortization of leasing liabilities. Bringing us to the period end, 677 million SEK of liquidity at hand. Slide 22, please. The group's net debt amounted to 1.854 million SEK at the end of the quarter, and net debt in relation to LPM adjusted EBITDA ended at 1.8 times within 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 800 million SEK. We continue to see excellent M&A opportunities, both in our Nordic home market and in continental Europe. And our strong financial position means that we can act decisively as the right opportunities materialize. Handing it back over to you, Adam, to summarize and conclude.

Thank you, Esper. Slide 23, please. And moving to slide 24 for the key topic of sustainability. Our sustainability report for 2020 was our first ever consistent with the global reporting initiative standard. We're now taking further steps to professionalize our ESG work. We're building our own in-house ESG capability, including having hired Maria Marine as part of the executive management team. We're tying together our ESG execution with our internal control processes. We recently discussed and approved our new code of conduct with the board, as well as updates to our supplier code of conduct, which is slated for rollout before year end. And we've taken the first steps to establishing a taxonomy framework into our metrics for the upcoming 2021 sustainability report. Moving to slide 25 for conclusions, please. Summarizing the quarter, on the back of combining organic initiatives with M&A, our growth journey continued and Q3 LTM sales amounted to 11.5 billion SEC. While facing tough comps and operating in a post-COVID environment with a total market contraction, we continued to strengthen our Nordic position and we took decisive steps on the European continent. Supply disruptions and demand complications threw a spanner in our and competitors' works, The environment in the next quarters is likely to continue to be complicated, but we see that our mitigating actions are having desired effects. A host of organic initiatives are in motion, including expanding installation services, last mile delivery services on the showroom network, investing in our tech and automation capability, and clustering our units around key platforms. We concluded two important acquisitions in the third quarter, and more is definitely to come. We updated our financial targets at the start of the year, and we're progressing well towards reaching these with Q3 Performa LTM sales now at 13.7 billion CZK. And finally, we continue progressing our work to create the undisputed European online home improvement platform. Moving to slide 26, this concludes our presentation, and we'll now open up the call for questions over to you, operator.