BHG Group - Q4 report – another strong beat
17% above consensus on headline numbers DIY grew EBIT adj. by 190% 2021e consensus expected to come up c. 5% Organic growth of 36% As expected, BHG reported a continuous high organic sales growth of 36%, a staggering 11pp above ABGSC estimates. In total, sales grew by 43% to SEK 2.
4bn, 6% above consensus and 12% above ABGSC. Furthermore, adjusted EBIT came in 17% above consensus and 25% above ABGSC, driven partly by a gross margin of 27. 2%, up 2pp y-o-y and 70bp above our estimates.
The strong gross margin was supported by an increased share of private label, pricing and forex tailwinds and efficiency gains on the back of high volumes. Opex/sales contracted 30bp on the back of operational leverage. Earn-outs burdened PTP by SEK 45m.
Adjusting for the abovementioned earn-outs, EPS adj. came in 9% ahead of our forecasts. DIY beat our expectations by far Like in the previous quarter, the DIY segment stands out with strong sales growth of 49% (of which 39% organic), reaching SEK 1.
4bn (10% vs ABGSC). The Home Furnishing segment grew 35% (30% organic) to SEK 923m, 15% ahead of our expectations. Furthermore, adjusted EBIT grew 190% to SEK 143m in DIY, 43% above our estimates.
However, Home Furnishing was slightly below our expectations with adjusted EBIT coming in 6% below our estimates, explained by transaction costs relating to the Nordic Nest acquisition and high online marketing costs in Eastern Europe. 2021 consensus estimates likely to come up mid-single-digit Apart from the slightly higher cost level in Home Furnishing, the report was strong across the board and we expect 2021 consensus estimates to be revised by mid-single digits. BHG will hold a conference call at 10:00 a.
m. Call in details: +46 (0)8 850 558 369.