Hello and welcome to the BHG webcast with teleconference. Throughout the call, all participants will be in listen-only mode. There will be an opportunity to ask question. If you have any question, please press zero-one on your telephone keypad. Today, I'm pleased to present Gustaf Öhrn, acting President and CEO, and Jesper Flemme, CFO. Please go ahead with your meeting. Thank you very much. My name is Gustaf Öhrn. I'm the acting CEO, and I'm also a member of the board of BHG. I'm happy to share with you this short presentation and together with Jesper Flemme, CEO, who's also here together with me, do our absolute best to answer your questions. Next slide. As you all know, the market is challenging, weakening demand and excess stock, not only in BHG, but also in the market in general. As you all know very well, this is the result of geopolitical turbulence, inflation, et cetera, but also something we call corona rebalancing. Very short but, what was strong during corona, both from a category perspective and channel perspective, now has it tougher. I also think it's important to keep in mind that even as the market remains challenging, which we believe it will be for the coming 12-18 months, the main structural trends of online migration and increased focus on your home remains unchanged and intact. We also believe that the corona rebalancing effect will fade off over time. BHG has grown rapidly from some SEK 200 million in 2012 through organic growth and also some 37 acquisitions to this current size of approximately SEK 30 billion. Focus has been on entrepreneurial accountability, decentralized structure, and above all, growth. We aim to remain decentralized, but we also understand that in today's market, we need to shift our focus more to profitability and more to cash flow and to reduce complexity and also realize those synergies that we know are there in order to reduce our cost levels. Next slide. In short, what we are doing is the following. We're putting in place a few structural changes and some organizational changes to facilitate the change. We're executing the necessary cost reductions. We're taking measures to reduce our stock levels. We have already renegotiated our covenants with our banks, and we have now also done a stock write-down. I will come back and address these actions in the following presentation. I can assure you that we are doing these actions to prepare BHG for the uncertainty that we believe is to come in the coming 12 to 18 months, and we do this to future-proof the company. Next slide. A few words about the result of the Q3. Sales came in what we believe fairly strong, considering the market, with a small growth of 1.5% in total numbers compared to last year. With this, we are confident that we have developed stronger than the market and that we have taken market share in this quarter. We should also note that our order intake is actually plus SEK 100 million stronger than sales, and this pertains primarily to the very strong segment of heat pumps, which has long installation times after placed orders. Although with a strong top line coming in higher than maybe anticipated, earnings came in lower than expected. This was driven by a weaker product margin, which we call Gross Profit 1, and was a result primarily of price pressure in the market. Cash flow was better than last year, but still negative. This is primarily a seasonal effect of strong incoming and strong sales in the Q2, which is then paid for in the Q3. Next slide. The structure and organizational changes, a few words about that. The board decided already in August that Adam Schatz had done a great job as CEO, which he truly has done. We believed it would be more beneficial for the group to have a new CEO with another skill set, given the operational challenges that comes from a tougher market. We're now currently looking for and recruiting for a CEO with a more operational background and a more operational profile. We have also decided and also communicated that we are dividing our business into three business units. We have Home Improvement under the lead of our Deputy CEO, Mikael Hagman. We have Value Home under the lead of BU lead Christian Eriksson, and we have Premium Living under the lead of Henrik Bergström. All three being experienced CEOs and entrepreneurs, and they will also join the management group on group level, thereby substantially strengthening the operational competence of the group. We have divided this business in this way because it reflects the buying behavior of our customers, but also because it reflects the difference in the business models between the companies in the group. Next slide. If we look at these three segments, Home Improvement is driven by a broad range of products and brands, strong on price, primarily driven through price matching, and based on the drop ship model for deliveries with Bygghemma as our lead brand. Value Home, serving the price-conscious consumer in the Nordics and Eastern Europe through primarily a private label-driven model with Trademax as its lead brand. Premium Living, selling a unique range of Scandinavian design increasingly to the international markets, primarily through a wholesale model with Nordic Nest and Svenssons as our lead brands. Why we do this, and this is the important part, because we believe that the main synergies lie within these business units with similar business models rather than on group. We believe that by doing this, dividing this business in this way, this is the best way to reduce complexity and thereby realize these synergies that we know are there and thereby reduce cost. A short summary of the other actions. Next slide, sorry. We're also initiating cost reductions in general, somewhere between SEK 150-200 million. The main reductions come on organizational cost and warehouse cost. We have excess stock, as does the market in general. We have managed to reduce our stock levels with some SEK 100 million in the Q3, and we have also initiated actions with the ambition to reduce it with additional SEK 100-200 million in the Q4. We believe there's room for further reductions, and we're planning for and doing more reductions in 2023. We have already agreed on a temporary leave on our covenants, valid until the end of 2023. Finally, we have decided to do a stock write-down on the value of SEK 375 million in order to better reflect the value of the products, and thereby also allowing us some further maneuverability. My final remark would be, with the risk of repeating myself, we do all this to prepare for what we believe will be a challenging period ahead of us. We believe the market will be tough. Exactly how tough it will be, it's hard to judge. We also do this to future-proof BHG and to make sure that we come out of this tougher period stronger than we went into it. Thank you. With that, me and Jesper is happy to receive your questions and do our utmost to reply to them. Thank you. Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause for questions to be registered. The first questions come from Carl Bergenbring at Carnegie. Please go ahead. Your line is now open. Thank you. A couple of questions from my side. First of all, on the exceptions from the covenants, you're talking about in the English press release, you're mentioning certain covenants, while in the Swedish press release, you're talking about the covenants. Could you, maybe first elaborate a bit what does this mean, and does this imply that you are, completely excepted from the covenants during this period, or how should we, interpret that? We have not been completely relieved of covenants. We have been given a headroom that we believe is the headroom needed given that we're also taking actions on both costs and inventory. The covenants are. Two of them are the same as before, the leverage ratio and the interest coverage ratio. We have also added a minimum liquidity covenant. Okay, thank you. What's right for you on the loans that you're now changing the conditions on, or is it entirely the same as before? If we exceed the leverage accepted before, that will result in a higher margin, yes. Okay, thank you. Another topic on the current trading. You're talking about here that you expect the sort of operational environment to become worse before improving. I'm just curious, is this basing anything on the current trading that you've seen here so far in October, or is it just your sort of view on the macro outlook? That is just the view on the micro outlook. As we all know, it's very hard to judge where it will go, but we just estimate that it's gonna be tough looking forward. Okay, fair enough. Then my final question is on the earn-out payments that you have now at SEK 1.4, you're recording this. Maybe could you sort of elaborate or remind us how these write-downs are working? Is it that you can only write down on these earn-outs when you actually know that the payout will be lower, or are these new numbers based on your sort of internal projections on the sales and earnings outlook that you're seeing now? The total amount of SEK 1.4 billion is always based on our best guess of actual payout. In turn, the total amount is based on the underlying performance of the acquired businesses, which means the amount can go up and it can go down depending on how these businesses develop in the years to come. Okay. And if- Very well. And- Yeah. Maybe I also should say, as you might know, that you can split in two. You have the earn-outs, and they are revalued in the P&L, and then you have the put option liabilities revalued in equity. Thank you. My final one on that topic, if you could maybe remind us out of this SEK 1.4, could you possibly provide any sort of timeline on the payout structure of this? Sure. Roughly SEK 350 million next year, another SEK 75 million in 2024, and then the rest of the amount is spread 2025 until 2027. Okay, perfect. I think that was all of my questions. Thank you very much. Thank you. Thank you. We have one more question in the queue. Just as a reminder, please press zero-one on your telephone keypad if you wish to ask a question. The next question is from ABG. We couldn't register the name, so please state your name, then ask your questions. Please go ahead. Your line is now open. Good morning, gents. Yes, my name is Benjamin Wahlstedt. I understand that it's a difficult name to grasp. I think you're right in stating that sales were higher than expected. Maybe if you could give us a bit more flavor on why that is the case. We don't give any forward-looking estimates, so it's hard to say that it's better than estimated. We have some categories doing well, and I think it's important to remember that in current times, even if demand is weakening, there's also categories doing extremely well. One, as we mentioned, is heat pumps. Another one is generators, et cetera. I think it's just important that there is segments doing really well, and there are segments that is tougher. One of the things we saw this summer was that some of the outdoor categories, garden furniture, et cetera, was a category where we had weaker sales than anticipated. That is one of the main reasons why we need to do this stock write-down. Did that answer your question or do you want more? Well, I always want more flavor. Is it possible to say sort of what portion of sales stem from, I guess you could call them electricity adjacent or energy price adjacent categories? I can't give you that number. Those product categories are still a smaller part of our assortment. Absolutely. Yeah. I understand. First to sort of elaborate a bit on the cost savings program, what will you do? It's important to keep in mind that we are not a monolith. We are a sort of a business built up of 20 separate businesses with their own CEOs running their business. We see there is room for cost savings, and we sort of run the group program. What is done exactly on entity level to realize these savings, I do not know entirely and I cannot disclose. Basically, we see that the main savings we can do comes from organizational changes and from warehouse savings. Of course, we're looking through all parts potential savings. Sure. I would imagine some employees are getting a worrisome call. Is it possible to put a number on this or say something about the employee cut down or the potential employee cut down at least? Sorry, can't help you with that one. We don't have that number yet, and we're still working on it, and it's not something that we actually plan to communicate. That is something that's handled by each entity and will be communicated if needed through that entity. Of course, we're following all the regulations and informing everybody that we need to do. Sure. Is it possible to put a timeline on this change? We will start immediately. From a cost-saving perspective, I think that you will see roughly 40% fall into the H1 of next year and the other 60 into the H2 of next year. All right. Just to be clear that the amount stated, SEK 150 million-SEK 200 million, is a gross effect in 2023. We will see cost relating to premises and energy moving in the other direction so that the net effect might be some SEK 50 million lower. Sure. Also just, yeah, for our understanding, will this incur any NRIs in terms of severance pay or anything like that? Right now, I would say it will not be any material amounts. That's my best guess right now. All right. Perfect. Those were all my questions as of now. Thank you very much. Thank you. Thank you. Thank you. The next question comes from Daniel Schmidt at Danske Bank. Please go ahead. Your line is now open. Thank you. Good morning, Gustaf and Jesper. Just a couple of questions from me. Could you just tell us what the net EBITDA ratio was by the end of Q3 to start with? Three-point-four. 3.4. Okay. Would you give any indication on what additional headroom you have received? No, I will just repeat that we feel is that is the headroom needed to move on with the initiatives to reduce inventory and costs. Yeah. All right. Just coming back to the initiatives, which seem quite substantial and quite aggressive ambitions, which is of course good and well needed, I guess, in this situation. Do you feel in any way that that's gonna jeopardize the customer experience? How would you pair that? No. We've been very clear on that we have done things that we believe can be done without hurting top line and without jeopardizing customer experience. We're also looking into the second stage if we need to do more structural things if needed. That has been the sort of precondition for this cost reduction, is to do it without any severe effect on top line or customer experience. You're not sort of pooling customer support or stuff like that? Nope. Okay. The final question, you did mention, of course, the gross and the net effect and, energy and premises and so on. What about the US dollar in terms of sourcing? How do you view that going forward? I mean, as you know, if the US dollar stays at this level, it can hurt individual quarters. In the long run, we still believe that we will be able to transfer those FX effects onto end consumers, but it might affect individual quarters. I was just thinking, I totally agree with that. I'm just thinking given the sort of sharp appreciation that we've seen lately, over the summer into the autumn when it comes to the US dollar, is that making it a bit more difficult to tag along with the neutralizing price increases? It's always difficult. You should also remember that, since the product sourced from Asia paid in US dollars is mainly flowing through our inventories, the effect there's a lag on the effect in the P&L. It's not that easy. For some of our business, absolutely you're right, that is a challenge. Yeah. All right, guys. Thank you. That's all for me. Thank you. Thank you. Thank you. The next question is from Kepler Cheuvreux. We couldn't register the name, so please introduce yourself and then ask your question. Please go ahead. Your line is now open. Thank you. Yes, this is Magnus Råman, Kepler Cheuvreux. I have a few follow-ups on questions already asked. In terms of firstly on staff reduction, I appreciate that it's still in the sort of planning phase here, but could you give a lead in terms of the staffing that the businesses have, the up-staffing that they have performed during the pandemic to meet increasing volumes? The decreasing staffing that you now plan, is that sort of on par, would you say, with what has been increased during the pandemic, or is it more or less? To be honest, that's quite a difficult question to answer straight out of my head. I mean, you're absolutely right that we had to scale up during the pandemic because we were under sales pressure in some areas, and we have done so. There's also, we believe, an underlying growth in the market. So to give you the exact number, if we have reduced what we increased at that stage, it would be hard to say. Sure. The reason to ask is if we would sort of think of this, staffing reduction as an adjustment for a sort of post-pandemic environment more than that it is sort of a crisis measurement to protect profitability. I think we should see it as both actually. I mean, some of the things we need to scale up during corona or the pandemic was needed to sort out the sort of need right then. There was also very limited time to realize synergies because we had to cope with the increasing sales pressure. Now there's opportunity to look those synergies and also with the structural changes we do. As I said, the main reason for the structural changes is to facilitate those synergies because we have not been able to focus on that during the pandemic, but we will do so. Excellent. On your gearing, you provided the 3.4 times number for Q3. Could you just give the number on net debt? That would also be good. I guess this of course that 3.4 times excludes leases and earn outs. What's the total gearing number? Also perhaps if you could reiterate that the covenants are based on a gearing without leases and earn outs please. The covenant is excluding leasing liabilities and liabilities related to acquisitions. Net debt at the end of Q3 is 2.1, but I don't have the number in front of me if you add up also leasing liabilities and acquisition-related liabilities. Sure. We got the earn-outs in the release, so and the leases did not change materially, sequentially? No. No. I think also in terms of the inventory questions here, you state you cleared inventory of SEK 100 million and you expect more in Q4. Could you provide your view of the market overall? Is your view, because you also mentioned that the main effect on your profitability, or the decline in the margin is sort of a gross margin pressure from you responding to the overall market pricing. Do you see when you plan to become more aggressive, so to speak, on working down inventory in this quarter compared to Q3, is that your view that the market is headed in the same direction? I think in general you are right. When with weakening demand, it very often comes with price pressure, and I think it's doing right, rightfully so also. I think there was an and in terms of an overstock situation, I would say that the situation were tougher for the summer season than it is looking forward because I think that was when we had almost a perfect storm in this category last year. As you, if you recall, sales was extremely strong. All the supply chains broke down. The lead times became extremely long. BHG and other actors placed big orders with long lead times that arrived sort of for the summer season, primarily this year, and then sort of sales weakening after the war in Ukraine. Because of that, there was a huge stock buildup. I think there's a general stock buildup in the market, but I think it pertains more to the summer season and those products than looking forward. With that said, I think the price pressure will to a very high degree be dependent on how the market develops. Sure. In terms of that, just a final one on the inventory you mentioned here. Of course, one main reason for you to make the inventory write-down is seasonal products, i.e., summer outdoor furniture and so on, that you mentioned that was not in high demand over the summer months. Now, I guess you will not be looking to try to clear this over the winter because I guess there's hardly any market for it. If we look to the next sort of Q2, and of course it's a bit out in time, but that's an important earnings quarter. Then you have sourced these items at much lower dollar rates than what we see now. You have an excess inventory to save for that season, and you have also written down the value of that inventory. Is it possible that there will be a reversed effect, so to speak, in the next season for the sell-out of these items? No, we don't believe so, but we are absolutely right in the sense that a very big part of the stock reduction will come in Q2 and Q3 next year. Because as you said, there's a high degree of summer products that it's very, very difficult or would come with very huge cost to try to liquidate today. As I said, we managed to reduce it down with SEK 100 million in the Q3. We believe there's room for an additional SEK 100 million-SEK 200 million in the Q4. We will continue the job into 2023, but I think we should say that the main effects will come in the second and Q3. Excellent. Thank you very much. Thank you. Thank you. Thank you. There are no more questions at this time, so I hand the word back to the speakers for any concluding remarks. We actually have one written question, and that's related to if there's any need of goodwill impairment. I would just say there's no need for goodwill impairment. Good. As a final remark, I just want to say thank you very much for listening. I can just assure you that we are doing everything we can, working extremely hard. We're not only focusing on cost and cash flow as it might look when we're talking about this. We're focusing on all levers we can. We're doing our best to improve on our top line. As always also in crises, there is opportunities and there will be even more opportunities. When you talk about opportunities, you often talk about M&A. It's not only M&A opportunities. There will be other opportunities arising as well. You know, doing what we can to improve on our top line, doing what we can to improve on our margins, and of course, focusing hard on both cost and cash flow. As I sort of pointed out, doing our very, very best to get structurally right and to realize a lot of the synergies that we are confident lies in the group. Last but not least, we're doing this to future-proof the company and make sure that we come out of this stronger than we went in. Thank you very much. Thank you. That concludes today's call. You may now disconnect.