BHG Group AB (publ)

Thank you, operator, and good morning, everyone. If we move to slide two, please. We grew in the quarter despite our own high comparative figures from Q4 of last year and despite the weak overall markets. The BHG recipe combining organic initiatives with M&A and unlocking synergies was thus once again in display with especially strong performance in mainland Europe and with Germany now having made top three amongst our largest geographies. Our progress towards becoming the undisputed European online leader within home improvement continues. Slide three, please. I'll start this morning's presentation by reviewing the Q4 highlights. I will then move on to the business update. Jesper will then cover the financial update before I conclude and we launch into the Q&A session. And slide four, please. On to slide five, please, for the Q4 highlights. In a weak overall market, and despite tough comps, net sales from the quarter reached 3.5 billion FIC, up 48%, corresponding to perform organic growth of 9% and organic growth of 2%. Adjusted EBIT amounted to 186 million, corresponding to an adjusted EBIT margin of 5.3%. Cash flow from operating activities at minus 247 million, continued to be affected by the disruptions to the global supply chains, which, among other things, have led us to accept higher inventory levels for now, as we have previously communicated, and as we will get back to in the financial section. The environment in the quarter was similar to that of Q3, with consumer spend on services having normalized to pre-pandemic levels, while supply disruptions continued to be in place. However, Our performance in the quarter, as well as over the longer term, provides confirmation that we continued gaining market shares, more on which shortly. Slide six, please. Zooming in on organic and pro forma organic growth, we did well in the quarter, given our high comparable figures and the decline in the overall market. Organic growth amounted to 2%. This against the Q4 of 2020, which saw organic growth of 36%. Like for like, on a performer basis, our units grew by 9%, in other words, a similar level as in the previous quarter. Slide seven, please. Now, taking a broader perspective on growth, to the left, the group's net sales is up by well over 100% compared to the pre-pandemic level, a period over which performer organic growth has increased by 25% per annum. Turning to the middle of the slide, the group share of net sales from outside of the Nordics has increased by eight percentage points, and Germany became our third largest geography in the quarter. And over to the right, our growth in the quarter, just as our growth over the past two years, shows that we continue to strengthen our position. The total home improvement market is larger than in pre-pandemic times, although it did contract somewhat in the quarter from its pandemic peak of last year. However, The growth trajectory of our underlying markets remains intact. We reaffirm that we believe our markets will go by around 15% per annum over a business cycle. Although a higher base for online penetration has been established, penetration remains low and is sure to continue expanding. Slide eight, please. For a quick reminder on our total addressable market opportunity, we estimate that the total Nordic market offline and online is worth some 300 billion SEK per annum. A large market indeed, however, eclipsed by the orders of magnitude larger European ones. This is the backdrop against which we revised our medium-term financial targets in the first half of last year, including that we're going for 20 billion second net sales on the next leg of our journey. A temporarily weaker market offers a leader like BHG opportunities to further strengthen our position and extend our lead, including by continuing our still nascent foray into mainland Europe. Slide nine, please. Moving to the business update, slide 10, please. Our recipe combines organic initiatives and M&A with the synergy possibilities created between the two. Our organic strategy remains focused on our four cornerstones of assortment, scale and own brands, and unrivaled digital experience and supporting infrastructure. In addition to benefiting from the secular trend of rising online penetration, We continue adding product categories, and we continue adding geography. We're also further industrializing our approach to M&A. We have the organizational capabilities, and we have the proven track record. We also have the deal flow, as we will see shortly. Our markets are still fragmented. This is true for the Nordics, but also size, perhaps to an even greater extent to the European continent. And we continue refining our post-merger integration playbook. We've fine-tuned how we go about integrating the bolt-ons onto our platforms, and the model for how the group ensures that we leverage the assortment, delivery infrastructure, and data and automation across our units. Moving to slide 11, please. And a quick update on organic initiatives along these headings, i.e., assortment, delivery, and data and automation. We continue to expand our assortment in the quarter in support of our mission, We Make Living Easy. A growing number of units are now operating in our proprietary system for automated product data exchange. And we are grouping our units to reduce complexity, including consolidating a number of our own brands into the newly acquired half a bathroom group. We are making significant investments into delivery. Within the DIY segment, these include bolstering our drop shipping capabilities to meet 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're well underway with automating parts of our warehousing infrastructure and upgrading our customer data platform, more on which shortly. Turning to slide 12 for an ESG update. The process of integrating ESG into our strategy is well underway. ESG is a broad area, as you well know, and our priorities are guided by the materiality analysis we concluded a little while back and include the areas shown in this slide. More specifically, the past quarter saw us updating our code of conduct as well as the code of conduct for our suppliers. We're now at the point of defining our sustainability targets and intend to include these in our 2021 sustainability report due out in the week of April 4. Furthermore, we will report in accordance with the EU taxonomy. Turning to slide 13 for a quick update on M&A. Acquisitions remain an important tool going forward and 2021 became the busiest M&A year for us to date. We evaluated more than 100 opportunities, and we added six new stars to the BHG Galaxy. We firmly established ourselves as the most relevant acquirer in our field, a position we have previously attained in the Nordics, but which we have now also established in mainland Europe. Despite deciding not to follow through on a couple of potential acquisitions in the quarter due to sellers' valuation expectations not adequately reflecting the prevailing market circumstances, the 2022 M&A outlook is promising. In addition to having further defined the Nordic M&A map, its mainland European equivalent is also taking clear shape. Before turning to our customer metrics, first a few remarks on digital marketing. Slide 14, please. Our marketing approach differs from a majority of our peers, and we're further developing it. On the top left-hand side, the e-commerce approach of many online players has long been grounded in leveraging cookie-based personal data to optimize marketing. With regulatory changes and the ramping up of privacy-first initiatives by firms such as Apple and Google, This approach is becoming increasingly fraught with challenges, not least since many actors do not leverage non-personal data to optimize their approach to customers and assortment. Bottom left, BHG's success and marketing efficiency, by contrast, has not revolved around cookie-based personal data, but rather customer cohort-based data, as well as search volume data, both to optimize how our workshops are structured and the richness we apply to aspects such as landing pages and editorial content. Similarly, our assortment expansion has always been data-driven, allowing us to avoid making bets and improving our SEO rankings. Over to the right-hand side, since a little while back, we have in earnest begun to complement our marketing model with investments into our customer data platform, or CDP, taking with us the elements that have served us well to date and adding the CDP layer on top. The depiction you see on the right-hand side is inspired by Google's take on the customer journey, which we in principle agree with and have modified to suit our purposes. We are taking the concept to make shopping easy to the next level by incorporating every step in the customer journey into our CDP setup. This will further improve our search rankings and so drive organic traffic. It will also be empowered by consent-based personal data, increasing the quality of paid traffic, reducing search costs, and allowing tailor-made personalized offerings. As we write in the report, the first launch of our CDP is imminent, and we will then dock additional BHG businesses onto it. In addition to perfecting the unit by unit approach to the customer journey, the BHG CDP will also enable leveraging insights between our units and so drive customer lifetime value and brand awareness. Turning to slide 15 for customer developments. Traffic generation conditions resembled what we saw in the third quarter and were clearly more challenging than in the preceding year. Despite this, Our customer base continued to grow and our customer metrics held up well. As you can see to the left on this slide, the number of active customers defined as customers who have made at least one purchase in the past 12 months surpassed the 4 million mark, an increase of 15%. We succeeded in maintaining the number of orders per customer as well as the marketing ROI at the same level as in the previous quarter, while the share of net sales from repeat customers edged up to close to 50%. Our investment into gaining further insights from customer-related data across the group continue, as we just discussed. More generally, driving BHG towards a higher level of customer centricity remains a key focus area for group management. Slide 16, please. Summarizing, this is BHG today at a glance. On the left-hand side, our CAGR since 2014 exceeds 40%. In this period, EBITDA has grown by more than 100% per annum. Our EBIT margin on an LTM basis stands at 6.4% and is generated by our over 100 customer-facing web properties. And now moving over to the right-hand side, these web shops have been visited over 400 million times in the past 12 months, generating over 5 million orders from customers in 24 countries. And finally, our leading product portfolio comprises some 1.5 million skis. Slide 17, please. I'm handing it over to Jesper who will walk us through the financial update. Slide 18, please.

Thank you, Adam. As we now put the fourth quarter behind us, we can conclude that we continue to strengthen our market position despite the overall market contracting and high comps. As Adam mentioned, net sales increased 48.1% to reach almost 3.5 billion SEK. Proforma organic growth reached 9.3% and organic growth reached 1.8%. The general market scenario from the third quarter continued in the fourth with bottlenecks and price increases along the supply chain and fears of competition for customers, which among other things resulted in higher costs for online marketing compared with the year earlier period. Despite this, Both our segments grew organically in the period, which means that the home furnishing segment turned around the negative organic growth from the preceding quarter. A guess at EBIT amounted to 186 million sets, corresponding to an EBIT margin of 5.3%. Let us now turn to slide 19 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 Q4 2020 EBIT margin of 8.2% is a tough comparison as it was favorably affected by COVID-related market factors. Our product margin amounted to 39.5% in the quarter, 0.8% higher than last year. The negative impact from increases in supplier prices and freight rates was mitigated by significant price increases and mix improvements. Fulfillment costs increased in the quarter compared to last year, driven by supply disruption, longer lead times, and our decision to accept higher inventory levels for now to ensure product availability. Marketing costs increased in the quarter, driven by a higher share of sales from our own brand, high growth in new geographies, and a generally tougher traffic generation environment with a higher cost per click. 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, as well as a higher share of owned brands. Finally, the increase in depreciation and amortization was primarily driven by continued tech investments. All in all, our EBIT margin amounted to 5.3% in the fourth quarter, Let us now have a closer look at the drivers of SG&A in the quarter, slide 23. Comparing SG&A in Q4 this year with the same period last year, it's fair to say that Q4 2020 is a tough starting point as it was boosted by extraordinary demand, temporary underinvestment, and subdued CPCs. starting by looking at the organizational cost part of SG&A. As we reported a year ago, both segments struggled to catch up with high demand during the first year of the pandemic, and especially the DIY segment was underinvested. This has been rectified and customer satisfaction not only restored, but elevated. We have continued investment in assortment, delivery, and data and automation. The continued expansion of own brands in DIY requires somewhat higher SG&A. And finally, scale effects are visible in both segments, and especially so in the home furnishing segment. Turning to the marketing part of SG&A, our higher share of brands in DIY requires a higher cost of sales than for well-known external brands. We have experienced high growth in new geographies with higher cost per click than the Nordics. And finally, just as in Q3, we have faced a tougher traffic generation environment with elevated CPCs as a result. Let us turn to cash flow, slide 21, please. Cash flow from operating activities amounted to minus 247 million cents, and was mainly impacted by the build-up of inventories to ensure high product availability to counter the disruptions in the global supply chain. I will get back to inventory build-up on next slide. The right-hand graph showing the development in liquidity walks us through the starting period position of 299 million SEK, deducting the cash flow from operations and 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 refinancing completed in Q2, but also include amortization of leasing liabilities, bringing us to the period end, 274 million SEC of liquidity at hand. Slide 22, please. The full year 2021 cash flow was negatively impacted by one billion SEC from changes in working capital. About 880 million SEC of this was driven by increases in inventory. Roughly one third of the inventory increase was driven by business growth and M&A, as well as mixed effects from higher share of owned brands. Another third was driven by various ripple effects from supply chain disruption, such as late arrival of seasoned products, longer lead times, and higher freight costs. Also, as a consequence of the disruptions in the supply chain, we have accepted a higher safety stock, and this increase accounts for the last third of the inventory buildup. Our current stock levels makes us well-positioned for having a high availability going into high season, and we expect strong cash flow in 2022. Slide 23, please. The group's net debt amounted to 2.251 million SEK at the end of the year, and net debt in relation to LTM adjusted EBITDA ended at 2.3 times within the medium-term financial target range. Our financial position is strong. On top of our liquidity at hand, we had unutilized credit facilities at the end of the quarter of 800 million SEK, which means that we can continue to execute both organic and inorganic growth initiatives. Handing it back over to you, Adam, to summarize and conclude.

Thank you, Jesper. So on slide 24 and turning to slide 25, please. Summarizing the quarter. On the back of combining organic initiatives with M&A, our growth journey continued and full year 2021 net sales amounted to 12.7 billion SEK. While facing tough comps, we continued to strengthen our Nordic position and we took decisive steps on the European continent, as evidenced by Germany now being our third largest geography. Supply disruptions and demand complications were similar to what we saw in the third quarter. Although the environment in the next quarter is likely to continue to be complicated, we see that our mitigating actions are having desired effects, and we believe that peak complications may be behind us. A host of organic initiatives, which sort under the headings assortment, delivery, and data and automation, are in advanced motion, as we discussed just now. 2021 was a record M&A year for us. Although we did not conclude any acquisitions in the fourth quarter, the M&A outlook is strong. We updated our financial targets at the start of the year and we're progressing well towards reaching these with 2021 performance sales now at 14 billion SEK. And finally, we continue our quest to create the undisputed European online home improvement platform. Moving to slide 26. The past couple of quarters have made for a more difficult operating environment than we have seen in a while. But with full year 2021 now behind us, I believe it's worthwhile to take stock on what we have achieved since going public back in March of 2018. When we were at 5 billion SEC, we said that we would double in size and improve profitability. And we have. We've grown by more than 35% annually, and we've surpassed the 10 billion SEC mark by margins. And our EBIT has increased more than fourfold. Finally, while strengthening our Nordic position, we have also increased our share of net sales from outside the Nordics from 2% to 14% over this period. Slide 27, please. And turning to the future. Here and now, we're investing to advance our positions, organic and acquisition-driven growth, not least in continental Europe, remains the focus. A temporarily weaker market provides an excellent opportunity for a leading player to strengthen its position. In a medium-term perspective, we will have achieved and surpassed our financial targets, including attaining 20 billion SEC in sales. At the same time, we will have significantly enhanced our ability to serve our customers in the best possible way. And in the long term, on the back of our current investments into assortment, delivery, and data and automation, DHE will have fully emerged as the leading online player in Europe in home improvement with the broadest customer platform in the market. Turning to slide 28, this concludes our presentation, and we'll now open up the call for questions. Over to you, operator.