This article first appeared on GuruFocus .
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Revenue:Net sales increased by 10.2% to more than SEK3 billion.
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Organic Growth:9.6% organic growth in the quarter.
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Adjusted EBIT:SEK134 million, an increase of SEK60 million compared to last year.
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Adjusted EBIT Margin:4.4%, improved by 0.1 percentage points year-over-year.
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Operating Cash Flow:SEK338 million, strong cash flow in line with seasonal patterns.
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Net Debt:SEK935 million at the end of the quarter.
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Leverage:Net debt to LTM adjusted EBITDA improved to 2.0 times.
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Liquidity:Increased from SEK301 million to SEK565 million by the end of the quarter.
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Release Date: July 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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BHG Group AB ( STU:7B1 ) achieved an organic growth rate of almost 10% in the second quarter, marking the seventh consecutive quarter of organic growth.
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The company reported a significant improvement in adjusted EBIT, which increased by SEK60 million compared to the previous year.
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Operating cash flow was strong at SEK338 million, aligning with seasonal patterns and contributing to a stronger balance sheet.
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The acquisition of Hillerstorp is expected to strengthen BHG Group AB's product offerings and market position, particularly in the Garden category.
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BHG Group AB is leveraging AI initiatives to enhance customer experience and operational efficiency, which is expected to drive future growth.
Negative Points
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Profitability in the quarter was below expectations due to an unfavorable product mix, particularly in the Home Improvement business unit.
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The gross margin was negatively impacted by strong growth in low-margin categories like Gardening Equipment, diluting overall margins.
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Marketing efficiency was reduced due to uneven demand across categories, impacting profitability.
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The Finnish market remains challenging, with growth prospects less favorable compared to other regions.
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Increased freight costs and potential currency fluctuations pose risks to future profitability, with timing of impacts difficult to predict.
Q & A Highlights
Q: Could you quantify the gross margin impact from the product mix and any positive FX impact? A: Gustaf Oehrn, CEO, explained that they haven't quantified the exact mix effect, which primarily comes from the Home Improvement segment. The mix effect is due to strong sales in the low-margin Garden category, particularly Robotic Lawnmowers, and lower sales in the high-margin Bathroom category. Jesper Flemme, CFO, added that the currency effect is seen in the Value Home segment but did not provide specific figures.
Q: Why did the other external costs grow by 18%? Is it related to AI tools or something else? A: Jesper Flemme, CFO, clarified that the increase in external costs is mainly due to marketing expenses growing in line with sales. Personnel costs only increased by SEK3.6 million or 1.6% year-over-year. Gustaf Oehrn, CEO, added that they are pleased with their cost control regarding fixed costs.
Q: With the current mix, do you expect similar gross margin challenges in the coming quarters? A: Gustaf Oehrn, CEO, acknowledged last year's strong Bathroom category performance but remains positive about future development due to a strong assortment and high owned brand levels. The impact from Robotic Lawnmowers, a low-margin category, is expected to decrease in Q3 and Q4.
Q: How do you view the impact of the weak US dollar and rising freight costs on your margins? A: Jesper Flemme, CFO, noted that while the direction of these factors is correct, the timing of their impact is hard to predict. Most products in the Value Home segment are already shipped or in inventory. Gustaf Oehrn, CEO, added that despite recent freight cost increases, they still consider the levels reasonable.
Q: Can you provide financial details on the Hillerstorp acquisition? A: Jesper Flemme, CFO, stated that it was an asset acquisition involving the brand and inventory, with no associated losses. Gustaf Oehrn, CEO, explained that they aim to transition Hillerstorp from a B2B to a private label business, leveraging its strong brand name across their platforms for high profitability.
Q: What is the expected financial impact of the Hillerstorp acquisition on your top line? A: Jesper Flemme, CFO, indicated that for 2026, no significant impact is expected as the season is over. For 2027, a small contribution is anticipated, as they have limited ability to work with the assortment for the next season. The acquisition is seen as a long-term strategic investment.
Q: Could you elaborate on your unique assortment strategy across different business units? A: Gustaf Oehrn, CEO, highlighted that increasing the share of unique assortment is a core strategic initiative. Home Improvement has about 20% unique assortment, Value Home over 85%, and Premium Living around 5%. The focus is on intercompany sales and developing own brands, particularly in Home Improvement and Premium Living.
Q: What are the updated figures for the earn-out payments? A: Jesper Flemme, CFO, stated that they will pay another SEK30 million this year, with SEK50-60 million expected next year. The remaining amount will be split between 2028 and 2029. SEK20 million was paid in Q2, which is lower than previous guidance due to timing and assessment adjustments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
