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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 2019 2020e 2021e
Sales 6213 8639 9142
Sales growth (%) 24,9 39,1 5,8
EBITDA 468 821 778
EBITDA margin (%) 7,5 9,5 8,5
EBIT adj 290 650 617
EBIT adj margin (%) 4,7 7,5 6,8
Pretax profit 233 555 554
EPS rep 1,64 3,94 4,04
EPS growth (%) 253,2 139,8 2,4
EPS adj 1,98 4,25 4,36
DPS 0 0 0,5
EV/EBITDA (x) 15,7 19,9 20,7
EV/EBIT adj (x) 25,3 25,2 26,1
P/E (x) 35,5 37,3 36,4
P/E adj (x) 29,4 34,6 33,7
EV/sales (x) 1,2 1,9 1,8
FCF yield (%) 0,7 4,8 3,4
Dividend yield (%) 0 0 0,3
Net IB debt/EBITDA 2,3 0,7 0,4
N/A N/A N/A
SEKm 2019 2020e 2021e
Sales 6213 8639 9142
COGS -4722 -6412 -6820
Gross profit 1491 2228 2322
Other operating items -1023 -1406 -1544
EBITDA 468 821 778
Depreciation on tangibles -44 -50 -52
Depreciation on intangibles 0 0 0
EBITA 323 606 574
Goodwill impairment charges 0 0 0
Other impairment and amortisation -41 0 0
EBIT 282 606 574
Other financial items 0 0 0
Net financial items -49 -52 -20
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 233 555 554
Tax -53 -125 -114
Net profit 180 430 440
Minority interest -4 -6 -6
Net profit discontinued 0 0 0
Net profit to shareholders 177 423 434
EPS 1,64 3,94 4,04
EPS Adj 1,98 4,25 4,36
Total extraordinary items after tax -7,5 -43,2 -43,2
Tax rate (%) -22,8 -22,5 -20,6
Gross margin (%) 24 25,8 25,4
EBITDA margin (%) 7,5 9,5 8,5
EBITA margin (%) 5,2 7 6,3
EBIT margin (%) 4,5 7 6,3
Pretax margin (%) 3,8 6,4 6,1
Net margin (%) 2,9 5 4,8
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 24,9 39,1 5,8
EBITDA growth (%) 205,8 75,6 -5,3
EBIT growth (%) 223,6 114,9 -5,3
Net profit growth (%) 254,7 138,5 2,4
EPS growth (%) 253,2 139,8 2,4
Profitability 2019 2020 2021
ROE (%) 6,2 13,9 12,7
ROE Adj (%) 7,5 15 13,7
ROCE (%) 6,7 13,6 11,7
ROCE Adj(%) 8 14,5 12,6
ROIC (%) 5,1 9,8 9,4
ROIC Adj (%) 5,2 10,5 10,1
Adj earnings numbers 2019 2020 2021
EBITDA Adj 475 865 822
EBITDA Adj margin (%) 7,7 10 9
EBITA Adj 330 650 617
EBITA Adj margin (%) 5,3 7,5 6,8
EBIT Adj 290 650 617
EBIT Adj margin (%) 4,7 7,5 6,8
Pretax profit Adj 281 598 597
Net profit Adj 217 463 474
Net profit to shareholders Adj 213 457 468
Net Adj margin (%) 3,5 5,4 5,2
N/A N/A N/A
SEKm 2019 2020e 2021e
EBITDA 468 821 778
Net financial items -49 -52 -20
Paid tax -53 -125 -114
Non-cash items 44 105 14
Cash flow before change in WC 410 750 658
Change in WC -19 96 15
Operating cash flow 391 845 673
CAPEX tangible fixed assets -98 -94 -137
CAPEX intangible fixed assets 1 3 0
Acquisitions and disposals -252 0 0
Free cash flow 43 753 536
Dividend paid 0 -6 -54
Share issues and buybacks 0 13 0
Other non cash items -887 -544 -162
Decrease in net IB debt -559 472 285
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 2897 3050 3050
Indefinite intangible assets 0 0 0
Definite intangible assets 1294 1348 1412
Tangible fixed assets 51 60 82
Other fixed assets 20 27 27
Fixed assets 4720 4964 5096
Inventories 668 794 873
Receivables 359 398 438
Other current assets 0 0 0
Cash and liquid assets 270 877 1210
Total assets 6018 7033 7617
Shareholders equity 2890 3205 3607
Minority 35 39 39
Total equity 2925 3244 3646
Long-term debt 814 911 911
Pension debt 23 24 24
Convertible debt 0 0 0
Deferred tax 250 256 256
Other long-term liabilities 507 708 708
Short-term debt 48 67 67
Accounts payable 535 691 731
Other current liabilities 459 655 749
Total liabilities and equity 6018 7033 7617
Net IB debt 1066 594 309
Net IB debt excl. pension debt 1043 570 285
Capital invested 4747 4802 4919
Working capital 34 -153 -169
EV breakdown 2019 2020 2021
Market cap. diluted (m) 6270 15783 15783
Net IB debt Adj 1066 594 309
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 7336 16377 16093
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 114,3 132,4 124,8
Capital invested turnover (%) 144,8 180,9 188,1
Capital employed turnover (%) 158,9 192,2 184,7
Inventories / sales (%) 9,4 8,5 9,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 8,3 7,1 7,8
Working capital / sales (%) 0,1 -0,7 -1,8
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 36,4 18,3 8,5
Net debt / market cap (%) 23,5 3,8 2
Equity ratio (%) 48,6 46,1 47,9
Net IB debt adj. / equity (%) 36,4 18,3 8,5
Current ratio (%) 111,9 133,9 148,9
EBITDA / net interest (%) 958,6 1584,8 3888,6
Net IB debt / EBITDA (%) 227,8 72,3 39,8
Interest cover (%) 1019,1 1106,1 2366,5
N/A N/A N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 107 107 107
Fully diluted shares Adj 107 107 107
EPS 1,64 3,94 4,04
Dividend per share Adj 0 0 0,5
EPS Adj 1,98 4,25 4,36
BVPS 26,91 29,85 33,6
BVPS Adj -12,11 -11,11 -7,96
Net IB debt / share 9,9 5,5 2,9
Share price 42,15 147 147
Market cap. (m) 4526 15783 15783
Valuation 2019 2020 2021
P/E 35,5 37,3 36,4
EV/sales 1,18 1,9 1,76
EV/EBITDA 15,7 19,9 20,7
EV/EBITA 22,7 27 28
EV/EBIT 26 27 28
Dividend yield (%) 0 0 0,3
FCF yield (%) 0,7 4,8 3,4
P/BVPS 2,17 4,92 4,38
P/BVPS Adj -4,82 -13,23 -18,46
P/E Adj 29,4 34,6 33,7
EV/EBITDA Adj 15,4 18,9 19,6
EV/EBITA Adj 22,2 25,2 26,1
EV/EBIT Adj 25,3 25,2 26,1
EV/cap. employed 1,7 3,5 3,1
Investment ratios 2019 2020 2021
Capex / sales 1,6 1,1 1,5
Capex / depreciation 219,8 183,9 262,3
Capex tangibles / tangible fixed assets 194,1 156,3 167,9
Capex intangibles / definite intangibles -0,1 -0,2 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 87,1 82,8 64
N/A N/A N/A

Equity research

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Media

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 % 31 Oct 2020
Swedbank Robur Fonder 8.5 % 8.5 % 31 Oct 2020
Capital Group 8.0 % 8.0 % 30 Sep 2020
Handelsbanken Fonder 5.0 % 5.0 % 24 Nov 2020
Lannebo Fonder 4.3 % 4.3 % 31 Aug 2020
Cliens Fonder 3.4 % 3.4 % 31 Oct 2020
Norges Bank 2.7 % 2.7 % 31 Oct 2020
Arbejdsmarkedets Tillægspension (ATP) 2.6 % 2.6 % 30 Sep 2020
Vitruvian Partners 2.2 % 2.2 % 31 Oct 2020
Fidelity Investments (FMR) 2.1 % 2.1 % 30 Sep 2020
Source: Holdings by Modular Finance AB

Insider list - Bygghemma

Name Quantity Code Date
Adam Schatz + 50 000 BUY 31 Aug 2020
Jesper Flemme + 50 000 BUY 31 Aug 2020
Mikael Olander - 26 150 SELL 28 Jul 2020
Mikael Olander - 262 000 SELL 27 Jul 2020
Mikael Olander -1 250 000 SELL 18 Jun 2020
Mikael Olander -3 030 000 SELL 17 Jun 2020
Adam Schatz + 3 700 BUY 28 Feb 2020
Martin Edblad - 770 102 SELL 12 Nov 2019
mikael olander - 496 532 SELL 12 Nov 2019
Adam Schatz + 1 200 BUY 18 Jul 2019

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