RECORD SALES, EBIT AND CASH GENERATION Bygghemma Group First AB - PowerPoint PPT Presentation

2019/Q2 RECORD SALES, EBIT AND CASH GENERATION Bygghemma Group First AB (publ) 1

2019/Q2 Today’s presenters Martin Edblad Adam Schatz Acting President and CEO CFO Bygghemma Group since 2012 Bygghemma Group since 2019 • • CFO of CDON Group (now Qliro Group, publ) (2010-12) Axiell Group 2015-2019 (CFO, Head of Business Division) • • CFO of MTG’s online business area (2004-10) Gambro and Baxter 2008-2015 (Regional CFO, Head of • • UK & Ireland…); Teknoseed AB 2000-2008 (CEO); Goldman Sachs 1998-2000 (Analyst) Bygghemma Group First AB (publ) 2

2019/Q2 Agenda • Results highlights • Business update • Financial update Q2 2019 ‒ Group ‒ DIY segment ‒ Home Furnishing segment ‒ Cash flow and financial position • Summary • Q&A Bygghemma Group First AB (publ) 3

2019/Q2 Agenda • Results highlights • Business update • Financial update Q2 2019 ‒ Group ‒ DIY segment ‒ Home Furnishing segment ‒ Cash flow and financial position • Summary • Q&A Bygghemma Group First AB (publ) 4

2019/Q2 Record sales, EBIT and cash generation Sales growth continues to outperform the Record-high adjusted EBIT in absolute Record-high operating cash flow – Nordic overall market terms and adjusted EBIT margin 201% cash conversion Adjusted EBIT margin Q2 2019 (SEKm) Net sales (SEKm) Adjusted EBIT (SEKm) Cash conversion +20.5% +39.9% 201% Organic growth 8.6% (24.7) 137,5 1 708,8 224,3 100,4 1 417,8 71,7 111,5 5.1% 5.9% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Adjusted Change in Capex Operating EBITDA NWC cash flow Note: Items affecting comparability impacting EBIT totaled SEK 0.3 million (7.4) for the quarter attributable to acquisition-related expenses Bygghemma Group First AB (publ) 5

2019/Q2 Agenda • Results highlights • Business update • Financial update Q2 2019 ‒ Group ‒ DIY segment ‒ Home Furnishing segment ‒ Cash flow and financial position • Summary • Q&A Bygghemma Group First AB (publ) 6

2019/Q2 Bygghemma Group at a glance The clear Nordic online leader in home improvement Significant scale and profitability 0.4% 2.5% 3.9% 5.0% 4.1% 4.6% 4.4% 4.7% 5 460 5 169 4 974 4 649 CAGR 3 956 +46% 2 604 Net sales Apr-Jun 2019 1 895 Other Norway 6% 7% 1 096 Denmark Home 11% furnishing DIY 39% 61% Sweden 2014 2015 2016 2017 2018 LTM Q2 LTM Q1 LTM Q2 57% 2018 2019 2019 Finland 19% DIY Home furnishing Eliminations Adjusted EBIT margin Note: Adjusted EBIT excludes Items affecting comparability. Bygghemma Group First AB (publ) 7

2019/Q2 Acquisition strengthens category leadership within lighting • Acquisition of Lampgallerian i Växjö AB on 10 May • Lampgallerian, a leading pureplay online retailer in Sweden for indoor and outdoor lighting had net sales and an operating margin in excess of SEK 40 million and 6 percent, respectively, in 2018 • The acquisition further strengthens Bygghemma Group’s leading Nordic online position in Home Furnishings Bygghemma Group First AB (publ) 8

2019/Q2 Agenda • Results highlights • Business update • Financial update Q2 2019 ‒ Group ‒ DIY segment ‒ Home Furnishing segment ‒ Cash flow and financial position • Summary • Q&A Bygghemma Group First AB (publ) 9

2019/Q2 Sales mainly driven by visits and growth in AOV Pick-up in organic growth and strong developments in Continued strong development in KPIs recently acquired businesses Net sales (SEKm) +20.5% # of visits +46% Q2 2019 43 583 (000’s) Organic Q2 2018 29 827 growth 8.6% # of orders +8% Q2 2019 503 (000’s) Q2 2018 465 1 708,8 Conversion Q2 2019 1,2 rate 1 417,8 (0.4 p.p.) (%) Q2 2018 1,6 Q2 2019 3 417 +15% Average order value Q2 2018 2 974 (SEK) Q2 2018 Q2 2019 10 Bygghemma Group First AB (publ)

2019/Q2 Higher AOV translates to improved unit economics Gross margin of different average orders values ILLUSTRATIVE • Markedly improved unit economics with same freight cost (assumed at SEK 400) when the average order value Average increases Gross Margin 2 Order Value (%) (AOV), (SEK) +1.9 p.p. • Examples, assuming a freight cost of 16,9% 4 000 / + 31% 17,0% 400 SEK and all other costs the same as 16,5% a share of sales 16,0% ‒ If the average order value increases from 16,0% 3 500 SEK 3,000 to SEK 3,250, then the fully 3 500 15,5% loaded gross margin 2 increases by ~1 ppt 15,0% ‒ If average order value increases from SEK 3 250 15,0% 3,000 to SEK 3,500, then the fully loaded 3 000 +500 / 14,5% 3 000 gross margin 2 increases by ~2 p.p. +17% 14,0% When AOV increases by 17%, profit contribution increases by 31% 2 500 13,5% AOV1 AOV2 AOV3 AOV GM2% Bygghemma Group First AB (publ) 11

2019/Q2 Improved gross margin and record high EBIT Record-high adjusted EBIT and highest adjusted EBIT margin Gross margin improved due to growth in AOV and ancillary to date revenues, as well as pricing and cost improvements Adjusted EBIT (SEKm) Adjusted EBIT margin Gross margin (%) +2.7 p.p. +39.9% 23,3% 20,6% 100,4 71,7 5.1% 5.9% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Note: Items affecting comparability impacting EBIT totalled SEK 0.3 million (7.4) for the quarter attributable to acquisition-related expenses Bygghemma Group First AB (publ) 12

2019/Q2 DIY segment Strong growth – continued Nordic market share gains • DIY represented 61% of the Highest quarterly EBIT level to date Net sales increased by 16.2% - continued market share gains in Group’s net sales in the second quarter all Nordic markets during the Net sales (SEKm) Gross margin Adjusted EBIT (SEKm) Adjusted EBIT margin quarter +16% • Strong performance in the +16% 1 046,2 categories of garden, flooring, 51,8 doors and windows and increase in revenue from ancillary services 900,5 44,6 • Sales growth further augmented by targeted acquisitions • Adjusted EBIT of SEK 51.8 million (44.6) for the quarter – the highest level to date and adjusted EBIT margin of 5.0% (5.0) • Accelerating organic growth 19.2% 20.5% 5.0% 5.0% and strong momentum going into the third quarter Q2 2018 Q2 2019 Q2 2018 Q2 2019 Bygghemma Group First AB (publ) 13

2019/Q2 Home Furnishing segment Solid growth and record-high EBIT • Home furnishing represented 39% of the Highest quarterly EBIT level to date Net sales increased by 27.8%, buoyed by accelerating organic Group’s net sales in the second quarter growth and strong performance Net sales (SEKm) Gross margin Adjusted EBIT (SEKm) Adjusted EBIT margin in recently acquired businesses +87% • +28% Increased market shares in all geographies 53,8 669,8 • The continued roll-out of Bygghemma Group’s own last- mile logistics operations in 524,0 Sweden is progressing well, with the Öresund region next in line for 28,8 in-house coverage • Adjusted EBIT amounted to SEK 53.8 million (28.8) for the quarter, the highest quarterly level to date and adjusted EBIT margin of 8.0 percent (5.5) 23.0% 27.4% 5.5% 8.0% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Bygghemma Group First AB (publ) 14

2019/Q2 Cash flow and financial position Record-high operating cash flow Record-high operating cash flow Liquidity driven by strong operating cash flow (including impact from IFRS 16) – 201% cash conversion Q2 2019 (SEKm) Cash conversion SEKm 201% M&A capex of SEK 101.1m in the period (24.7) 137,5 224,3 (147,4 ) 295,2 (93,0 ) 281,7 111,5 226,9 Impacted by Currently not items affecting utilising overdraft comparability of facility SEK 0.3m Q4 2018 liquidity CF from CF from CF from Q2 2019 liquidity Adjusted EBITDA Change in NWC Capex Operating cash flow operations investing financing activities activities Bygghemma Group First AB (publ) 15

2019/Q2 Cash flow and financial position Financial position remains solid Overview of financial position • Net debt / EBITDA of 1.2x, outperforming SEKm 30 Jun 2019 financial target of 1.5 – 2.5x 1,389.0 Interest bearing liabilities • The Group’s unutilised credit facilities Cash and cash equivalents (281.7) amounted to SEK 456 million at the end of the period, compared with SEK 395 million at the (362.6) Adjustment lease liabilities beginning of the year (391.9) Adjustment for earn-outs and deferred payments • Strong financial position to facilitate growth Adjustment for debt fees 4.9 investments and continued M&A 357.7 Net debt / (net cash) Q2 2019 LTM adjusted EBITDA 289.4 Net debt / LTM adjusted EBITDA 1.2x Bygghemma Group First AB (publ) 16

2019/Q2 Agenda • Results highlights • Business update • Financial update Q2 2019 ‒ Group ‒ DIY segment ‒ Home Furnishing segment ‒ Cash flow and financial position • Summary • Q&A Bygghemma Group First AB (publ) 17