BHG Group AB (publ)

Thank you, operator, and good morning, everyone. Moving to slide two, please. We strengthened our position in the quarter, yet again delivering profitability. Despite challenging trading conditions, high comparative figures, and the main focus on defending profitability rather than market share, we held up well against the contracting market. At the same time, investments in the technology and customer platform continued, positioning us to take advantage of unchanged long-term growth trends. Slide three, please. I'll start this morning's presentation by reviewing the Q2 highlights and providing a business update. Jesper will then cover the financial section before I conclude and we launch into the Q&A session. And slide four. On to slide five, please, for the Q2 highlights. While the long-term conditions for profitable cash generating growth are unchanged, conditions have shifted in the shorter term. We are living through the aftermath of the pandemic and spend on services has fully normalized. Now, in addition, consumer sentiment has suffered a blow. At the same time, it's important to point out that our markets remain larger than they were before the outbreak of the pandemic. Furthermore, our focus on price leadership throughout our portfolio from the value to the premium range puts us in good stead as consumers' disposable incomes are likely to be under pressure for some time to come. Against this backdrop, net sales came in at 3.9 billion SEC, corresponding to total growth of 10% on the back of recent acquisitions. Performa organic growth amounted to minus 7%, and Pure organic growth to minus 8%, more on which shortly. Adjusted EBIT amounted to 162 million, corresponding to an adjusted EBIT margin of 4.2%. Cash flow from operating activities at minus 162 million was adversely affected by working capital developments, which we will come back to, but also by timing effects between the first and second quarters of the year and the nature of recent acquisitions. Measures to adjust purchasing were instituted some while back, and the effects of these will kick in fully from the second half of the current quarter. Slide six, please. Zooming in on organic and pro forma organic growth, at minus seven and minus eight percent respectively, we did quite well in the quarter given the significant contraction in the total market against the highs reached during the pandemic. We at least maintained our position in the Nordic region while our geographic expansion contributed positively. Slide seven, please, for a longer perspective on growth. To the left, the group's net sales has increased by 129% over the past three years, a period in which performer organic growth amounted to 17% per annum and pure organic growth to 10% per annum. Turning to the middle of the slide, the group's share of net sales from outside of the Nordics has increased by 17 percentage points since 2019, and Germany confirmed its position as our third largest geography in the quarter. And over to the right, our growth in the quarter again confirms that we continue to strengthen our market position. The total home improvement market, although in a rough patch currently, is larger than in pre-pandemic times. And we maintain that the longer-term growth trajectory of our underlying markets remains intact. Slide eight, please. Moving to the business update. Slide nine, please. Our recipe combines organic initiatives and M&A with the synergy possibilities created between the two. The organic strategy remains focused on our four cornerstones of assortment, scale and own brands, an unrivaled digital experience and supporting infrastructure. In the quarter, we continued to invest in our technology platform and further improved our ability to leverage the breadth of our assortment through all our sales channels. Further customer satisfaction continued on its path to higher levels. Turning to the middle section of the slide, M&A, acquisitions will remain an important tool going forward. However, given current elevated market uncertainties, we are particularly selective and discriminant. Nonetheless, in the quarter, our M&A team evaluated numerous potential acquisition candidates. We saw evidence of valuation expectations on the sales side adjusting to new realities, and we completed an in-depth mapping of the German M&A landscape. And over to the right, we are unlocking synergies from assortment, tech, data, and infrastructure across the group. In the quarter, we saw continued progress along the path towards larger units with harmonized tech. Moving to slide 10, please. Traffic generation conditions resembled those seen in the past quarters. In a contracting market, our active customer base at 3.9 million held up quite well year on year and is up by 41% over a two-year period. As you can see on the top right hand side, our key customer related metrics remain healthy with both orders per active customer and repeat orders somewhat higher than last year and a continued healthy marketing ROI. Investments into gaining further insights from customer related data across the group continue. We launched our customer data platform in Finland in the first quarter with early promising results. And three of our Swedish units are progressing towards launches during the latter part of this year. More generally, driving BHG towards a higher level of customer centricity remains a critical focus area for us. Technology investments into optimizing and personalizing sales and marketing, as well as driving customer satisfaction, are key in this regard. Slide 11, please. Handing it over to Jesper, who will walk us through the financial updates. Slide 12, please.

Thank you, Adam. As per Adam's introduction, in the second quarter of the year, we further advanced our position despite a difficult market situation. Net sales increased 10% to reach 3.9 billion SEK, pro forma organic growth amounted to minus 7% and organic growth to minus 8%. Total growth was driven by the operations added to the group through acquisitions since the corresponding period last year. with Hyma and AH Trading being the largest additions. Adjusted EBIT amounted to 162 million SEK, corresponding to an EBIT margin of 4.2%. The EBIT margin was negatively impacted by higher shipping, product, fulfillment and traffic generation costs. The weak Swedish krona also adversely impacted earnings. I will get back to the EBIT margin compared to last year in a while. slide 13 and the segment view net sales in the due to sell segment grew by five percent to reach 2.3 billion sec while the home furnishing segment grew by 17 percent and net sales amount to 1.6 billion sec adjusted ebit amount to 180 million second due to self segment corresponding to an ebit margin of 5.1 percent and to 60 million SEK in the home furnishing segment, corresponding to an EBIT margin of 3.7%. As in the first quarter, price increases compensated to a great extent for high shipping and inventory costs in the home furnishing segment, while that was not the case within the do-it-yourself segment. However, the adjusted EBIT margin in the home furnishings segment was negatively affected by traffic generation costs and the weak Swedish corona. Let's turn to slide 14 and a closer look at our EBIT margin compared to last year. The gross margin development in the quarter was attributable to increases in the prices of raw materials, shipping prices that remained high, higher costs for fulfillment and traffic generation, as well as the weak Swedish Corona. Cost increases were partly offset by implementation of price increases. However, due to tough campaign pressure in the market, not least when it comes to our portfolio of own brands, the ability to adjust prices was more limited. Cost for online marketing remained high as a result of weak demand and tough competitive pressure. The increase in organizational cost from same period last year is partly explained by the continued high share of sales from our own brands, which requires a somewhat larger organization and partly by continued long term investments to drive customer centricity. Finally, increase in depreciation and amortization was primarily driven by continued tech investments and new lease agreements. All in all, our EBIT margin amounted to 4.2% in the second quarter. Let's turn to cash flow, slide 15, please. Cash flow from operating activities amounted to minus 162 million SEK, negatively impacted by changes in working capital as a result of inventory build-ups during the period. The inventory build-up in turn was driven by a delayed beginning of the outdoor season, a weaker than expected demand in the German market and a competitive situation for the do-it-yourself segments portfolio of owner brands. Actions have been taken to reduce and delay purchases, which are estimated to become fully effective beginning in the second half of the third quarter. The right hand graph showing the development in liquidity walks us through the starting period position of 274 million SEC, deducting the cash flow from operations and the impact of investing activities, a majority of which is M&A related, and finally adding the financing activities, which are primarily related to the new share issue completed in the period and the amortization of our revolving credit facility, but also include amortization of leasing liabilities, bringing us to the period end, 520 million SEC of liquidity at hand. Slide 16, please. The group's net debt amounted to 1.803 million SEK at the end of the quarter, and net debt in relation to LTM-adjusted EBITDA ended at 2.5 times, just inside 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 1 billion SEK. Handing it back over to you, Adam, to summarize and conclude.

Thank you, Jesper. Slide 17, please. And turning to slide 18. As we write in the report, much has changed, while at the same time, nothing has changed when it comes to our prospects. Much has changed in the sense that we're living through especially turbulent market conditions. With the aftermath of the pandemic affecting consumption patterns, markets temporarily shrinking, and now more generally, consumer confidence having been pummeled. In addition, Russia's war of aggression can be expected to continue for some time to come, creating further business uncertainty and complexity. And yet nothing has changed in that the secular trends of rising online penetration and consumers focus on their homes remain intact. We continue to be in the driver's seat in terms of leading the consolidation of our markets over the coming years. This is a period, we believe, in which the winners of the future will crystallize, and we are in an excellent position to be counted among these. Moving on to slide 19, please. Nevertheless, we operate in a market, online high ticket items, that has taken a hit by recent developments. The fact that we continue delivering profitability, also under current conditions, demonstrates the strength of our model and the strength of our market position. we will continue to prioritize as follows through the coming quarters profitability first and foremost coupled with cash flow generation and also important but third on our list for now growth and only growth which is profitable and cash generating this entails preparing for a prolonged challenging market situation by fully leveraging our size adjusting pricing campaign and marketing strategies carefully being particularly disciplined in terms of strategies to reduce working capital and discerning in terms of M&A, while at the same time continuing our range and geographic expansion, as well as investments in customer centricity. And the final slide for this morning, slide 20, please. Summarizing the quarter, our journey continues. We held up better than the market organically and with recent acquisitions, we grew by 10% in the quarter. Performa LTM sales now stands at 13.9 billion. Our Nordic online position was strengthened while we took share on the European continent with Germany, our third largest geography. We believe that the supply situation will continue to normalize, albeit in fits and starts, and we have positioned ourselves to see improvements in our working capital situation rest of the year. Weak consumer sentiment is likely to be in play for some time to come. In this changed landscape, we have adjusted our tactics and are prioritizing profitability and cash flow generation ahead of growth for now. At the same time, the underlying secular trends of rising online penetration and consumers' focus on their home environments are intact. By continuing to invest into customer centricity, data and automation, we are well positioned to further leverage our Nordic pole position and to continue expanding our presence on the European continent. Moving to slide 21, please. This concludes the presentation. Over to you, operator, to moderate the Q&A.