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BHG Group

BHG Group

Home improvement online

BHG has grown to be the leading online retailer of DIY and home furnishing goods in the Nordics, with a market share of ~30%. The group has also expanded into Eastern Europe through the acquisition of Furniture1. The drop-shipping model is a key success factor for BHG, but it has recently established an in-house solution for last-mile deliveries, allowing for an increased range of services.

We believe that BHG could reap the benefits of a fast-growing online market within Home Improvement. In addition, we see room for the company to fuel growth further through M&A, while a greater share of proprietary brands could support its margins going forward.

A global recession caused by COVID-19 could put a dent in demand. We do not rule out that new market entrants could compete for BHG’s No.1 spot. BHG runs a clear acquisition-driven agenda. Hence, there are naturally some M&A related risks.

SEKm 2020 2021e 2022e
Sales 8968 10525 11752
Sales growth (%) 44,4 17,4 11,7
EBITDA 892 962 1117
EBITDA margin (%) 9,9 9,1 9,5
EBIT adj 701 752 900
EBIT adj margin (%) 7,8 7,1 7,7
Pretax profit 550 655 803
EPS rep 3,86 4,79 5,89
EPS growth (%) 134,8 24,2 22,8
EPS adj 4,17 5,11 6,21
DPS 0 0,5 1
EV/EBITDA (x) 24,3 17,2 14,5
EV/EBIT adj (x) 30,9 22 18
P/E (x) 46,3 27,7 22,6
P/E adj (x) 42,9 26 21,4
EV/sales (x) 2,4 1,6 1,4
FCF yield (%) 4,7 5 5,6
Dividend yield (%) 0 0,4 0,8
Net IB debt/EBITDA 2,8 2,3 1,7
Lease adj. FCF yield (%) 3,9 4 4,6
Lease adj. ND/EBITDA 2 1,6 1,1
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 8968 10525 11752
COGS -6637 -7797 -8703
Gross profit 2331 2728 3048
Other operating items -1439 -1766 -1932
EBITDA 892 962 1117
Depreciation on tangibles -49 -66 -69
Depreciation on intangibles 0 0 0
EBITA 658 709 857
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 658 709 857
Other financial items 0 0 0
Net financial items -107 -54 -54
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 550 655 803
Tax -130 -135 -165
Net profit 420 520 638
Minority interest -6 -6 -6
Net profit discontinued 0 0 0
Net profit to shareholders 415 515 632
EPS 3,86 4,79 5,89
EPS Adj 4,17 5,11 6,21
Total extraordinary items after tax -43,1 -42,8 -42,8
Tax rate (%) -23,6 -20,6 -20,6
Gross margin (%) 26 25,9 25,9
EBITDA margin (%) 9,9 9,1 9,5
EBITA margin (%) 7,3 6,7 7,3
EBIT margin (%) 7,3 6,7 7,3
Pretax margin (%) 6,1 6,2 6,8
Net margin (%) 4,7 4,9 5,4
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 44,4 17,4 11,7
EBITDA growth (%) 108,7 7,8 16,1
EBIT growth (%) 133,1 7,9 20,9
Net profit growth (%) 133,2 23,8 22,6
EPS growth (%) 134,8 24,2 22,8
Profitability 2020 2021 2022
ROE (%) 14,6 17,5 19,1
ROE Adj (%) 15,8 18,6 20,2
ROCE (%) 13,3 12,2 13,9
ROCE Adj(%) 14,2 13 14,5
ROIC (%) 8,8 8,4 10,1
ROIC Adj (%) 9,4 9 10,6
Adj earnings numbers 2020 2021 2022
EBITDA Adj 935 1004 1160
EBITDA Adj margin (%) 10,4 9,5 9,9
EBITA Adj 701 752 900
EBITA Adj margin (%) 7,8 7,1 7,7
EBIT Adj 701 752 900
EBIT Adj margin (%) 7,8 7,1 7,7
Pretax profit Adj 593 698 846
Net profit Adj 453 554 672
Net profit to shareholders Adj 447 549 666
Net Adj margin (%) 5 5,3 5,7
Depreciation and amortisation -234 -252 -259
Of which leasing depreciation -185 -186 -191
EO items -43 -43 -43
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 935 1004 1160
EBITDA lease Adj margin (%) 10,4 9,5 9,9
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 892 962 1117
Net financial items -107 -54 -54
Paid tax -130 -135 -165
Non-cash items 178 49 49
Cash flow before change in WC 833 821 946
Change in WC 162 35 36
Operating cash flow 994 856 981
CAPEX tangible fixed assets -94 -137 -176
CAPEX intangible fixed assets 4 0 0
Acquisitions and disposals 0 0 0
Free cash flow 904 719 805
Dividend paid -6 -54 -107
Share issues and buybacks 13 0 0
Other non cash items -3138 -385 -355
Decrease in net IB debt -1412 225 316
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 4395 4395 4395
Indefinite intangible assets 0 0 0
Definite intangible assets 1804 1858 1938
Tangible fixed assets 74 92 119
Other fixed assets 29 29 29
Fixed assets 6904 7035 7143
Inventories 992 1120 1251
Receivables 434 490 547
Other current assets 0 0 0
Cash and liquid assets 299 587 902
Total assets 8630 9232 9843
Shareholders equity 2787 3109 3497
Minority 36 36 36
Total equity 2823 3145 3532
Long-term debt 2043 2043 2043
Pension debt 23 23 23
Convertible debt 0 0 0
Deferred tax 375 375 375
Other long-term liabilities 948 948 948
Short-term debt 122 122 122
Accounts payable 717 842 940
Other current liabilities 980 1073 1199
Total liabilities and equity 8630 9232 9843
Net IB debt 2478 2253 1937
Net IB debt excl. pension debt 2456 2230 1915
Capital invested 6624 6721 6793
Working capital -270 -305 -341
EV breakdown 2020 2021 2022
Market cap. diluted (m) 19197 14280 14280
Net IB debt Adj 2478 2253 1937
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 21676 16533 16217
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 122,5 117,8 123,2
Capital invested turnover (%) 157,7 157,7 173,9
Capital employed turnover (%) 181,6 181,4 189,9
Inventories / sales (%) 9,3 10 10,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 7 7,4 7,6
Working capital / sales (%) -1,3 -2,7 -2,7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 87,8 71,6 54,8
Net debt / market cap (%) 23,8 15,8 13,6
Equity ratio (%) 32,7 34,1 35,9
Net IB debt adj. / equity (%) 87,8 71,6 54,8
Current ratio (%) 87,7 99,7 111,2
EBITDA / net interest (%) 830,3 1777,1 2064
Net IB debt / EBITDA (%) 277,9 234,3 173,5
Interest cover (%) 612,4 1311,3 1584,7
Lease liability amortisation -147 -148 -153
Other intangible assets 1804 1858 1938
Right-of-use asset 602 662 662
Total other fixed assets 29 29 29
Leasing liability 600 662 662
Total other long-term liabilities 1323 1323 1323
Net IB debt excl. leasing 1879 1591 1275
Net IB debt / EBITDA lease Adj (%) 201 158,4 110
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 107 107 107
Fully diluted shares Adj 107 107 107
EPS 3,86 4,79 5,89
Dividend per share Adj 0 0,5 1
EPS Adj 4,17 5,11 6,21
BVPS 25,96 28,96 32,57
BVPS Adj -31,78 -29,28 -26,42
Net IB debt / share 23,1 21 18
Share price 97,15 133 133
Market cap. (m) 10431 14280 14280
Valuation 2020 2021 2022
P/E 46,3 27,7 22,6
EV/sales 2,42 1,57 1,38
EV/EBITDA 24,3 17,2 14,5
EV/EBITA 33 23,3 18,9
EV/EBIT 33 23,3 18,9
Dividend yield (%) 0 0,4 0,8
FCF yield (%) 4,7 5 5,6
P/BVPS 6,89 4,59 4,08
P/BVPS Adj -5,63 -4,54 -5,03
P/E Adj 42,9 26 21,4
EV/EBITDA Adj 23,2 16,5 14
EV/EBITA Adj 30,9 22 18
EV/EBIT Adj 30,9 22 18
EV/cap. employed 3,9 2,8 2,5
Investment ratios 2020 2021 2022
Capex / sales 1 1,3 1,5
Capex / depreciation 182,4 208,3 256,9
Capex tangibles / tangible fixed assets 127,2 149,1 148,5
Capex intangibles / definite intangibles -0,2 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 66,8 71,6 57,8
Lease adj. FCF yield (%) 3,9 4 4,6
N/A N/A N/A

Equity research

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Media

BHG Group - Company presentation with CEO Adam Shatz and CFO Jesper Flemme
BHG Group - Company presentation with CEO Adam Schatz and CFO Jesper Flemme (in English)

Main shareholders - Bygghemma

Main shareholders Share capital % Voting shares % Verified
EQT 20.0 % 20.0 % 30 Nov 2020
Swedbank Robur Fonder 9.2 % 9.2 % 28 Feb 2021
Capital Group 7.0 % 7.0 % 31 Dec 2020
Handelsbanken Fonder 5.6 % 5.6 % 4 Feb 2021
Lannebo Fonder 4.3 % 4.3 % 31 Aug 2020
Fidelity Investments (FMR) 2.7 % 2.7 % 31 Jan 2021
Arbejdsmarkedets Tillægspension (ATP) 2.6 % 2.6 % 30 Sep 2020
Cliens Fonder 2.5 % 2.5 % 28 Feb 2021
Vitruvian Partners 2.0 % 2.0 % 28 Feb 2021
Oberweis Asset Management Inc 1.8 % 1.8 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Bygghemma

Name Quantity Code Date
Mikael Hagman + 2 000 BUY 23 Feb 2021
Adam Schatz + 1 850 BUY 22 Feb 2021
Jesper Flemme - 9 000 SELL 15 Feb 2021
Jesper Flemme - 4 000 SELL 12 Feb 2021
Jesper Flemme - 10 000 SELL 12 Feb 2021
Jesper Flemme - 5 806 SELL 11 Feb 2021
Jesper Flemme - 15 000 SELL 11 Feb 2021
Jesper Flemme - 8 000 SELL 11 Feb 2021
Jesper Flemme + 78 256 Redemp 4 Feb 2021
Jesper Flemme - 78 256 Redemp 4 Feb 2021

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