BHG Group (BHG) Q3 2024 earnings summary

Executive summary

• Sales declined 17.7% year-over-year in Q3 2024, but the sales trend improved compared to the first half, with early signs of demand recovery.

• Profitability increased for the fourth consecutive quarter, with adjusted EBIT up SEK 40 million to SEK 52.5 million, driven by margin improvements and cost savings.

• Strategic focus on consolidation, efficiency, product expansion, price competitiveness, and international growth, including automation and warehouse reductions.

• Positive cash flow from operating activities of SEK 103.3 million and a cash conversion rate of 65.6%, supported by cautious inventory management.

• The group is positioned for a broader market recovery anticipated in the first half of 2025.

Financial highlights

• Net sales for Q3 were SEK 2,354.1 million, down 17.7% year-over-year; organic growth was -9.8%.

• Adjusted EBIT was SEK 52.5 million (2.2% margin), up from SEK 12.5 million (0.4% margin) last year.

• Cash flow from operating activities was SEK 103.3 million.

• Liquidity at period end was SEK 266.6 million, with SEK 800 million in unutilized credit facilities.

• Net debt stood at SEK 1,233.4 million, with net debt/EBITDA (LTM) at 4.56x.

Outlook and guidance

• Market remains challenging, but positive macro signals and early recovery are visible, especially in Sweden.

• Full market recovery is anticipated in the first half of 2025; 2024 will remain difficult.

• Focus remains on returning to pre-pandemic profitability levels (5%) and then to 7% as targeted, through growth, consolidation, and efficiency.