BHG Group AB (publ)

Good morning, everyone, and thank you for joining us today. I'm joined by our CFO, Jesper Flemmel. I will walk you through the operational highlights and our strategic progress before Jesper covers the financials in more detail. I will come back to summarize and then we will do our very best to answer your questions. Slide two, please. Q2 Highlights The second quarter was another step forward for BSG. We delivered accelerating organic growth, continued to see improving profitability and generated strong cash flow, while at the same time continuing to execute on the strategic priorities we communicated on our Capital Markets Day. The quarter was characterized by three main themes. Operational performance continued to improve. Organic growth accelerated to almost 10% and adjusted EBIT improved for the 11th consecutive quarter. Second, we continue to execute our strategy. We further increased our share of unique assortment, accelerated our AI initiatives and completed the first acquisition in a long time with the acquisition of Hillerstorp. And finally, we continue to see encouraging market developments, demand improved across most of our key markets and categories, supported by stronger consumer purchasing power. Overall, we believe the quarter demonstrates that our strategy is working. Slide 3, please. Summarizing the key numbers, the most important takeaway is that sales growth accelerated and came in at plus 3 billion SEC in the quarter, representing an organic growth of 9.6%. This being a significant growth acceleration compared to the first quarter and we can also happily conclude that we have continued growth in all three business units. Adjusted EBIT in the second quarter was 134 million SEK, a growth of 16 million compared to last year. An improvement in profit in both absolute numbers and EBIT margin. but somewhat negatively affected by an unfavorable product mix in the home improvement business unit. Operating cash flow of plus 338 million is a strong cash flow and in line with a seasonal pattern. Leverage continued to decline to just above two times EVDA, giving us increased financial flexibility. Slide four, please. Growth. We are very pleased to see that the accelerated growth we saw at the end of the first quarter continued and accelerated during the important second quarter. The strongest contribution came from our gardening category, including robotic lawnmowers, in combination with furniture and home decoration also developing well. Importantly, growth was broad-based across our businesses, with all major markets contributing positively. We continue to see strong momentum across the Nordic region, Germany and Eastern Europe. We saw growth in Finland also in this quarter, but we unchanged see Finland as the most challenging of our key markets. The improving macro environment is clearly helping, but our performance is primarily driven by our own execution, a stronger assortment and improved customer offering. Overall, we remain unchanged positive regarding demand and market development going forward. We also expect the online market to grow faster than offline in our categories. Increased online penetration, even further fueled by the current AI development, making the online shopping experience clearly surpassing the offline experience. Slide five, please. Profitability. We are proud to highlight that BSG has now delivered improvements in adjusted EBIT margin, both in absolute numbers and in EBIT margin over the last 11 consecutive quarters. That demonstrates that the operational implemented over the past few years continue to deliver results. That said, profitability in the quarter was somewhat below our own ambitions. The primary reason was an unfavorable product mix where we saw strong growth in gardening equipment, partly driven by robotic lawn mowers, the category with lower gross margins that has in the quarter diluted the total gross margin level. We unchanged see gross margins in branded goods as a challenging area, but the gross margin effect on home improvement that we saw in this quarter, we see primarily as a temporary mix effect rather than a structural issue. Our long-term strategy remains unchanged, and we continue to focus our efforts on strategic initiatives and additional revenue streams. This in combination with our focus on efficiency and cost structure. Slide six, please. Strategic priorities. As mentioned, our strategic priorities remain the same as we communicated on our capital markets day. First, we continue to increase our share of unique assortment. This strengthens differentiation while also improving our long-term margin potential. Second, AI is becoming an increasingly important tool to create competitive advantage both for customer experience, thereby driving growth and creating efficiencies. During the quarter, we accelerated our AI initiatives together with our strategic partner Algoritma within key areas as improving customer service, quality, speed and efficiency, streamlining product upload and securing data quality, decision support and product information and customer guidance, helping customers find, understand and choose the right products easier and faster. We continue to execute on our strategy of build and trial and then to scale the solutions across the group where we see real measurable business value. And thirdly, we focus on executing our disciplined M&A strategy. The acquisition of Hillerstorp is an excellent example of the type of acquisitions we want to make, strengthening existing platforms with limited financial risk. Slide seven, please. A few words on the Hillerstorp acquisition. Hillerstorp fits extremely well into our long-term strategy. It strengthened one of our largest and most attractive product categories while adding a highly respective Swedish brand with a strong market position. The acquisition is product-focused, expands our offering, increases our share of unique assortment, and creates attractive opportunities for cross-selling across several of our platforms. Equally important, it is an asset-based, low-risk, bolt-on acquisition in line with the disciplined M&A framework we presented at our Capital Markets Day. We continue to evaluate similar opportunities that strengthen our existing platforms while maintaining strict financial discipline. Slide 8, please. Let me conclude this section before I hand it over to Jasper with what is perhaps the most important message. While we cannot influence interest rates, consumer confidence or the broader macro environment, we can control how well we execute our business every single day. Our focus remains on supporting our business in being the best online retailers in our categories and markets. Building the best online customer experience through the right assortment, competitive prices, the best and most relevant offering and efficient operations. The improvements we have delivered over the last several quarters are not driven by one-off actions, but by consistently executing on these fundamentals. We believe that continued operational excellence combined with our strategic initiatives in unique assortment, AI and discipline M&A will take us to the goal that remains unchanged and clear, to grow faster than the market while improving profitability. And with that, I will hand it over to Jesper who will take you through the financial performance in more detail.

Thank you, Gustav. And please turn to slide nine. As Gustav already mentioned, we delivered another strong quarter with organic growth of almost 10%. Net sales increased by 10.2% to more than 3 billion SEK, while organic growth amounted to 9.6%. Looking at our segment, what stands out this quarter is the broad-based growth across the group compared to the first quarter, organic growth accelerated in all three business areas. From a geographic perspective, all of our major markets delivered growth during the quarter. The sales trend in the Nordic region remained favorable, mainly driven by Sweden and Norway. Outside the Nordics, sales growth in Germany and Eastern Europe was particularly strong. Turning now to slide 10 and profitability. Adjusted EBIT increased by 16 million SEK compared to last year, reaching 134 million SEK. This corresponds to an adjusted EBIT margin of 4.4%. We're pleased with the profitability improvement in premium living and in value home with both the improvement and the profitability level. In home improvement, Profitability also improved year over year. However, margin development was impacted by category mix effects, which I will come back to on the next slide. Move on to slide 11 and the EBIT bridge. The EBIT margin improved by 0.1 percentage points compared to last year, reaching 4.4%. Looking at the bridge, the main negative impact came from product margin, primarily within home improvement, As mentioned, this was driven by category mix effects. Garden, which has structurally lower margins, grew strongly during the quarter, while bathroom, which has structurally higher margins, was impacted by tough comparables. Marketing also had a negative impact compared to last year, reflecting the uneven demand across categories, mainly within home improvement, where this reduced marketing efficiency. At the same time, the other cost areas developed positively. Most notably, organizational costs improved, reflecting continued cost discipline and operating leverage. Overall, the positive development across the cost base largely offset the pressure from product margin and marketing, resulting in a slightly higher adjusted EBIT margin year over year. Moving on to slide 12 and cash flow. Cash flow from operating activities amounted to SEK 339 million during the quarter. The strong cash flow was driven by EBITDA together with a positive contribution from working capital. Compared to last year, accounts payable developed somewhat stronger than inventory as we deliberately maintained higher inventory levels to support the strong growth in the garden category. Turning to the graph on the right, liquidity increased from 301 million SEK at the beginning of the year to 565 million SEK at the end of the quarter, supported by the strong operating cash flow. Slide 13, please. Turning to our financial position. Net debt amounts to 935 million SEK at the end of quarter, and net debt in relation to LTM adjusted EBITDA improved to 2.0 times compared with 3.0 times at the same point last year. In addition, we had 800 million SEK in unutilized credit facilities at the end of the quarter. With that, I will hand back to you, Gustav, to summarize and conclude.

Thank you very much, Jesper. Slide 14, please. Let me conclude this with three key messages. First, our business continued to move in the right direction. We delivered our seventh consecutive quarter of organic growth and our 11th consecutive quarter of year-over-year profitability improvement. While we are not yet satisfied with our profitability level, the consistent progress over several quarters gives us confidence that our strategy is working. Second, we continue to execute on the strategic priorities that we have communicated to the market. During the quarter, we further expanded our unique assortment. We accelerated our use of AI across the businesses and completed the acquisition of Hillerstorp. These initiatives are all aimed at strengthening our competitive position and improving our long-term earnings potential in line with our financial targets. And finally, we remain firmly focused on operational execution and becoming the best online retailer in our markets and categories. As we have said before, we cannot control the macroeconomic environment Good morning, everyone, and thank you for joining us today. I'm joined by our CFO, Jesper Flemmel. I will walk you through the operational highlights and our strategic progress before Jesper covers the financials in more detail. I will come back to summarize, and then we will do our very best to answer your questions. Slide two, please. Q2 Highlights The second quarter was another step forward for BSG. We delivered accelerating organic growth, continued to see improving profitability and generated strong cash flow, while at the same time continuing to execute on the strategic priorities we communicated on our Capital Markets Day. The quarter was characterized by three main themes. The national performance continued to improve. Organic growth accelerated to almost 10% and adjusted EBIT improved for the 11th consecutive quarter. Second, we continue to execute our strategy. We further increased our share of unique assortment, accelerated our AI initiatives, and completed the first acquisition in a long time with the acquisition of Hillerstorp. And finally, we continue to see encouraging market developments, demand improved across most of our key markets and categories, supported by stronger consumer purchasing power. Overall, we believe the quarter demonstrates that our strategy is working. Slide three, please. Summarizing the key numbers, the most important takeaway is that sales growth accelerated and came in at plus 3 billion SEK in the quarter, representing an organic growth of 9.6%. This being a significant growth acceleration compared to the first quarter, and we can also happily conclude that we have continued growth in all three business units. Adjusted EBIT in the second quarter was 134 million SEK, a growth of 16 million compared to last year, an improvement in profit in both absolute numbers and EBIT margin, but somewhat negatively affected by an unfavorable product Operating cash flow of plus 338 million is a strong cash flow and in line with a seasonal pattern. Leverage continued to decline to just above two times EVDA, giving us increased financial flexibility. Slide four, please. Growth. We are very pleased to see that the accelerated growth we saw at the end of the first quarter continued and accelerated during the important second quarter. The strongest contribution came from our gardening category, including robotic lawnmowers, in combination with furniture and home decoration also developing well. Importantly, growth was broad-based across our businesses, with all major markets contributing positively. We continue to see strong momentum across the Nordic region, Germany and Eastern Europe. We saw growth in Finland also in this quarter, but we unchanged see Finland as the most challenging of our key markets. The improving macro environment is clearly helping, but our performance is primarily driven by our own execution, a stronger assortment and improved customer offering. Overall, we remain unchanged positive regarding demand and market development going forward. We also expect the online market to grow faster than offline in our categories. Increased online penetration, even further fueled by the current AI development, making the online shopping experience clearly surpassing the offline experience. Slide five, please. Profitability. We are proud to highlight that BSG has now delivered improvements in adjusted EBIT margin, both in absolute numbers and in EBIT margin over the last 11 consecutive quarters. That demonstrates that the operational improvements we have implemented over the past few years continue to deliver results. That said, profitability in the quarter was somewhat below our own ambitions. The primary reason was an unfavorable product mix where we saw strong growth in gardening equipment, partly driven by robotic lawn mowers, the category with lower gross margins that has in the quarter diluted the total gross margin level. We unchanged see gross margins in branded goods as a challenging area, but the gross margin effect on home improvement that we saw in this quarter, we see primarily as a temporary mix effect rather than a structural issue. Our long-term strategy remains unchanged and we continue to focus our efforts on strategic and additional revenue streams. This in combination with our focus on efficiency and cost structure. Slide six, please. Strategic priorities. As mentioned, our strategic priorities remain the same as we communicated on our capital markets day. First, we continue to increase our share of unique assortment. This strengthens differentiation while also improving our long-term margin potential. Second, AI is becoming an increasingly important tool to create competitive advantage both for customer experience, thereby driving growth and creating efficiencies. During the quarter, we accelerated our AI initiatives together with our strategic partner Algoritma within key areas as improving customer service, quality, speed and efficiency, streamlining product upload and securing data quality, decision support and product information and customer guidance, helping customers find, understand and choose the right products easier and faster. We continue to execute on our strategy of build and trial and then to scale the solutions across the group where we see real measurable business value. And thirdly, we focus on executing our disciplined M&A strategy. The acquisition of Hillerstorp is an excellent example of the type of acquisitions we want to make, strengthening existing platforms with limited financial risk. Slide seven, please. A few words on the Hillerstorp acquisition. Hillerstorp fits extremely well into our long-term strategy. It strengthened one of our largest and most attractive product categories while adding a highly respective Swedish brand with a strong market position. The acquisition is product-focused, expands our offering, increases our share of unique assortment, and creates attractive opportunities for cross-selling across several of our platforms. Equally important, it is an asset-based, low-risk, bolt-on acquisition in line with the disciplined M&A framework we presented at our capital markets day. We continue to evaluate similar opportunities that strengthen our existing platforms while maintaining strict financial discipline. Slide eight, please. Let me conclude this section before I hand it over to Jasper with what is perhaps the most important message. While we cannot influence interest rates, consumer confidence or the broader macro environment, we can control how well we execute our business every single day. Our focus remains on supporting our business in being the best online retailers in our categories and markets. Building the best online customer experience through the right assortment, competitive prices, the best and most relevant offering and efficient operations. The improvements we have delivered over the last several quarters are not driven by one-off actions, but by consistently executing on these fundamentals. We believe that continued operational excellence combined with our strategic initiatives in unique assortment, AI and discipline M&A will take us to the goal that remains unchanged and clear to grow faster than the market while improving profitability. And with that, I will hand it over to Jesper who will take you through the financial performance in more detail. Thank you, Gustav.