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Big Mac Group reported a robust financial performance in its Q2 2025 earnings call, with total sales increasing by 5.6% and a notable improvement in EBITA margin to 10.8%. The company’s strategic initiatives in product innovation and operational efficiency contributed to these results. According to InvestingPro data, the company has maintained profitability over the last twelve months, with analysts expecting continued net income growth this year. The stock price of Byggmax Group AB, a comparable entity, saw a modest increase of 0.54% following the announcement, trading at 55.9 SEK.
Key Takeaways
- Total sales grew by 5.6%, with like-for-like sales up 7.3%.
- EBITA margin improved significantly to 10.8%.
- Net debt to EBITDA ratio reduced from 1.5 to 0.8.
- New product innovations and store optimizations were highlighted.
- Cautious consumer sentiment persists due to global uncertainties.
Company Performance
Big Mac Group’s performance in Q2 2025 showcased a strong recovery, driven by strategic innovations and operational improvements. The company’s ability to grow sales by 5.6% and improve its EBITA margin to 10.8% reflects its effective management in a challenging market environment. The Nordic home improvement market, where the company operates, remains cautious due to global uncertainties, but positive indicators such as lower interest rates and improving real wages offer some optimism.
Financial Highlights
- Revenue: Increased by 5.6% year-over-year.
- EBITA: Reached 325 million Swedish krona.
- EBITA Margin: Improved to 10.8% from 8.8% last year.
- Net Debt to EBITDA: Reduced from 1.5 to 0.8.
Market Reaction
The stock of Byggmax Group AB, a comparable company in the sector, saw a slight increase of 0.3 SEK or 0.54% post-announcement, reflecting a cautiously optimistic market sentiment. The stock remains within its 52-week range, suggesting stable investor confidence.
Outlook & Guidance
Big Mac Group plans to maintain its focus on enhancing customer experience, operational efficiency, and inventory optimization. The company is preparing for continued high-season performance, leveraging its flexible business model and strong cash generation capabilities.
Executive Commentary
CEO Carl Sandlin emphasized the company’s adaptability, stating, "Our ability to shift quickly between seasons is a fundamental capability." CFO Helena highlighted the company’s consistent growth, saying, "After a period of declining sales, we have now delivered our fourth consecutive quarter of organic growth."
Risks and Challenges
- Global economic uncertainties affecting consumer sentiment.
- Competitive pressures in the Nordic home improvement market.
- Potential supply chain disruptions.
- Seasonal fluctuations impacting sales.
- Maintaining growth momentum amid cautious market conditions.
Q&A
During the Q&A session, analysts inquired about market growth challenges and the company’s cash discount strategies. The management emphasized the positive impact of an early spring on sales and maintained a cautiously optimistic market outlook.
Full transcript - Byggmax Group AB (BMAX) Q2 2025:
Operator: Hello, and welcome everyone to the Big Mac Group interim report q two twenty twenty five. My name is Becky, and I’ll be your operator today. During the presentation, you can register a question by pressing star followed by one on your keypad. If you change your mind, please press star followed by 2. I will now hand over to your host, Carl Sandlin, CEO, to begin.
Please go ahead.
Carl Sandlin, CEO, Big Mac Group: Thank you. Thank you very much. And, a very warm welcome to this conference call where we will present the q two report for 2025 for Big Mac Group. As you heard, I’m Carl Sandlin, the CEO, and with me is Svena Nachos, our CFO. And we do as usual.
We have a presentation of them that’s available on our website, and we’re trying to guide you to the correct page on that in that presentation during the call. And I begin with a with a brief business update, and then you will hear from Helena and more q two financials. And once we’re finished, we open up for your questions as usual. So let’s start and move to case number two in in the presentation on our website. As you know, the the second quarter marks the beginning of our high season.
And those familiar with us know that the online demand patterns in the sales in the second and third words are significantly higher than in the first and fourth. And throughout the spring this year, we have placed strong efforts on preparing for this high season across all parts of the group. And we are now seeing the results from this. And the ramp up from low to high season was well executed, and our operational performance during the quarter has been strong. Our like for like sales is 7.3% higher than last year, and the the sales development was quite similar in Sweden and in the rest of Nordic, but changes in in currency exchange rates impact sales increase outside of Sweden.
So total sales increased increased by 5.6. We see that several of our prioritized categories developed positively. For example, timber, building boards, and and paint. And we also saw continued positive development in our improved offering of customized online product. Quarterly growth was solid overall, though performance varied throughout the period.
The quarter started off strongly supported by early spring. However, the overall market climate continue to be shaped by cautious consumers in in response to to global uncertainty. We have a POC, a high gross margin in the quarter, and there are two main reasons for this. And one is the fact that our financial stability has enabled order order placements and payments. And the other is the improvement within e commerce, especially logistics.
And, of course, increased sales and the strong gross margin mean better profitability. And as you see, profitability continued to improve for the fifth consecutive quarter, and the EBITA margin is two percentage points higher than last year in the second quarter. It’s 10.8%. And in addition to to improve results, we continue to strengthen the balance sheet. We reduced both net debt and leverage, And net debt over EBITDA was point eight down from 1.5 at the same time a year ago.
So overall, our preference preparations for the high season paid off, and we remain fully focused for for the remainder of the season, of course. Before giving some more details when it comes to business update, outside the three just a short overview if if someone of you maybe doesn’t know us that well. We were founded back in 1993. Today, we have 212 stores across Nordic market. Our core is a strong selection of products for home renovation and maintenance primarily to consumers.
And we offer everything from building materials, paying times, flooring more. And then our in store assortment is enhanced by online providing an either even wide range, but maybe maybe more if they offer us a home delivery of heavy building materials and and also customized products. We are through the sales and offering the best prices required to maintain in the best possible cost. And everything we do from our store design to how we work through our processes. In addition to to the Big Mac brand, we also have right price tiles in Norway focusing on tiles and bathroom.
And also big borrow which offers products and delivery of home and car. On page four, you see that we price rise. Our sales last twelve months was 6,200,000,000.0 Swedish krona, and we delivered 325,000,000 in EBITA. And that’s an EBITA margin of 5.3% from 2.4 percentage points higher than a year ago. Our business model is efficient with high cash generation, and this is in a strong cash flow as you will hear more about later.
And we have a strong mix of physical stores and e commerce. Currently, we have about 80% of our total sales to our online sales channel. On page five, we have some general macro context. And as we all know, after a couple of challenging years, we began to see an improvement of macro factors during the second part of twenty twenty four with inflation back to more normal levels and gradually improving consumer sentiment. The last couple of months, there have been some more general global uncertainty in fact, the consumer confidence.
And I guess that the general view is that consumers continue to be cautious with increased household savings and overall recovery is still bad guys. However, it’s it’s positive to see that house transactions continue to develop in the right direction and together with lower interest rates and improved real wages, those are historical drivers for for renovation. And that’s all we’re it’s it’s very hard to predict the future while we follow the market development carefully to position ourselves in in the best possible way. We have short lead times, and we are used to quickly adapting our business to to different level of demand. But we have been able to to successfully navigate to the last quarters.
If you turn to page six, I would actually give you some example of that because operational control and flexibility are among Big Mac’s core strength. Our ability to to shift quickly between season is a fundamental capability. And and this year, perhaps more than before, we have stayed focused to on this core. We have dedicated time and and energy to strengthen our existing business. And as you know, sales in the second quarter are more than twice as high as in the first, reflecting the the seasonal nature of of our industry.
Because consumers carry out more renovation projects during during the the warmer months. So for us, that means that we need to be fully prepared to meet the search in demand without losing quality. To manage this, we have built for years strong capabilities in in hiring and adapting work schedules and maintaining flexible supply chains with frequent deliveries of goods, all to ensure a smooth and and and scalable operation. And and looking back at the quarter, we are satisfied with ramp up, and and we continue to have strong in store operations with low wage and satisfied customers, and and well functioning supply flows in in the quarter. And being prepared prepared for high season, of course, also means securing that we have the right product and stock if you look at page number seven.
Optimizing inventory has been a key focus area for us since since more than a year. It started with with the need to adapt inventory levels to a lower sales volume. Now it’s also about facilitating growth while securing capital efficiency. And we have as we have heard, we said before, conducted a thorough review of our entire product range to to fine tune the inventory levels with even greater precision. And for high priority items, we have raised our stock levels while reducing inventory for products with lower turnover.
Just to give a few examples, the the stocks of timber, drywall, paint are all up. 20% compared to last year. At the same time, our total inventory value is lower than last year. And and we have put a lot of effort into securing smart buildup of inventory for the season and resulting in good product availability and well stocked stores. And this has been one of the drivers for for growth.
And in addition, this early ordering and also payment has had a positive impact on our gross margin. On page eight, another positive contributor to the gross margin this quarter is the set of improvements we made to our ecom logistics. Our improved structure has enhanced our planning capabilities and and increased overall efficiency. And as a result, we have improved our freight net. Additionally, we have optimized our assortment online by taking out selected non core products.
And and finally, we continue to see positive growth in our offering of customized products sold online, including garden building, doors, windows, and more. And we see that this initiative has been positively received by our customers that support both margin and and sales in in account. So so several different areas of improvement when it comes to to ecom. And the same goes for store. Looking at page nine, because as always, we we strive to improve the the store experience.
And ahead of this season, nearly half of our stores were rearranged to better showcase our assortment, and we see that the response from customers have been positive with updated layout, improved customer flow, lower shelves. It’s it’s now easier for customers to navigate the store and find what they’re looking for. At the same time, we continue to invest in technology to make something with this much simpler and and even more intuitive, both online and in stores. And to meet the the the demand for guidance from from our customers, we have launched, for example, beta version of an AI chat tool that provides personal personal personalized advice and and product recommendations directly on our website. And together, had redefined customer service case.
It’s getting guidance and and all sorts of questions will be even easier for for our customers in the future. And also in the stores, we have further improved the the handheld devices, both when it comes to sales flow and also when it comes to product information. So this is just all part of a broader effort to create an even smoother and a more consistent experience, the actual aircraft or travel. And finally, during the quarter, we opened one new store in Southern Stockholm. And the new store complements our existing network in the region and improves accessibility for both new and returning customers.
So even if this is a quarter primarily focused on operations, we have also made meaningful commercial improvements that’s here across channels, and we continue to strengthen the customer experience. So to summarize, before handing over to Helena and more financials, The preparations we made ahead of of high system have paid off. And we have had a smooth transition from low to high system with strong operational execution and also a range of commercial improvements. Thank you. And over to Helena.
Helena, CFO, Big Mac Group: Thank you, Carl. I’ll talk you through the financial development during the second quarter, starting with a longer term perspective. On slide 10, we look at our rolling twelve months performance over the past three years. After a period of declining sales and extensive cost saving measures, we have now delivered our fourth consecutive quarter of organic growth. However, as Carl pointed out in today’s presentation, growth varied throughout the quarter.
And general global uncertainty continues to influence cautious consumer behavior. What is particularly encouraging is that we have a consistent improvement in EBITDA margin now for the fifth consecutive quarter. This margin expansion is the result of the disciplined execution and structural improvement presented across the business. On the next page, we will look more closely into sales figures and margin improvement in the quarter. Our strict focus on improving assortment and availability of core products in stores has contributed to a top line growth of 5.6%.
Adjusted for currency, mainly from a weak Norwegian krone, like for like growth exceeds 7% across all regions. It’s 7.4% in Sweden and 7.2% in the other Nordics. The increased sales are combined with an improved gross margin. We have the gross margin improvement of 0.6 percentage points versus last year. That margin expansion was driven by early supplier payments, unlocking cash discounts, and improvements in our our e commerce offering.
This includes assortment streamlining, optimizing of site plans, and the logistics setup. The combination of stable sales and improved margin has a clear impact on the bottom line as illustrated on the next slide. EBITDA reached 237,000,000, an increase of 53,000,000 compared to the second quarter last year. EBITDA margin rose to 10.8%, up from 8.8, highlighting the impact of our focus on margin and cost discipline. The improvement in the quarter is mainly driven by higher volume combined with a gross margin expansion.
We continue to manage cost with discipline. After two years of significant cost reduction, we have kept overall operating expenses to secure scalability. Cost is up mainly related to salary increases and store personnel to secure further power in high return. Moderate investment levels have also contributed to lower depreciation in the quarter. On next page, we can see how the performance translates into cash flow and, for instance, balance sheet.
In the quarter, we saw continued strong cash generation. Cash flow before working capital changed improved by 77,000,000, reflecting the stronger operating results. As expected, we have temporarily negative working capital efforts from reduced accounts payable due to early payments for margin enhancing discount. Investment levels remain low and disciplined. We continue to invest in areas that support the customer experience, such as such as electric forklifts, store layouts, and digital tools, while at the same time ensuring that the store network is well maintained.
We have also opened a new store in Stockholm during the quarter, and we continue to evaluate our store portfolio looking for new location. Our performance puts us in a solid financial position. And on the last slide, as we move deeper into the high season, we entered from a position of strength. Our net debt EBITDA now stands at 0.8 times, down from 1.5 times last year and well below our long term charge of 2.5 times. This redact reduction reflects both improved earnings and disciplined capital allocation over the past twenty four months.
We maintain access to committed credit facilities and benefit from strong relationships with our banks, ensuring stability and flexibility going forward. And that concludes the update from my side, and I’ll hand back to Carl before we move on to questions.
Carl Sandlin, CEO, Big Mac Group: Thank you, Dana. Please move to slide, I think it’s number 15 in presentation, our key messages again. As you have heard, we continue to increase sales and profitability in the 2025. Like for like sales up 7.3% in the quarter, and we have a stronger stable position. Leverage rates are down to 0.8.
North year is the strategic efforts to secure a strong platform, and our preparations ahead of the season paid off. The transition from low to high season was successfully carried out with strong operation control and and several commercial improvements at the same time. Going forward, we are parking three things, and it’s staying built to our customers. It’s driving sales and doing so by high with high operational operational efficiency. And we continue to focus on simplicity and speed and execution, which gives us flexibility, the flexibility we need in in our day to day operation.
And with this, a clear operational focus, efficient supply show, shows, and and improved in store experience, we are now continuing to focus on on on the high season. And our dedicated teams across The Nordics, they do a fantastic job every day and making sure to help our customers to succeed to make them succeed with with their home improvement code. So with that, thank you for for your attention, and we are happy to answer any questions. So let’s open up the floor for questions, please.
Operator: Thank you. If you wish to ask a question, please press star followed by one on your telephone keypad now. If for any reason you want to remove your question from the key, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Benjamin Wolstead from ABG.
Your line is now open. Please go ahead.
Carl Sandlin, CEO, Big Mac Group: Good morning, guys. Hope you can hear me. First of all, I was wondering what is your view of the overall market growth in the quarter, please? Hi, Benjamin. Thank you.
Well, in in future, we we know that the market continues to be characterized by austerity with with cautious consumers and and increased household savings. At the same time, see my three indicators like interest rate, inflation, and and how things have actually have improved compared compared to a year ago. And again, that’s back of the the quarter started off strongly, partly thanks to an early spring that gave a both in the month. That’s the technical strongest in the beginning of the period, which means that the growth for the full quarter was lower than than the strong start, which is. Perfect.
And then sort of following on that question then, the start that you’re showing you, you know, was was in April compared to March. Any idea of how that might have impacted you? I assume it’s a positive it’s a positive sort of one off calendar effect in in q three. Well, I think, you know, in the combination maybe of of Easter moving from different models, but also the fact that the spring came early to the Nordic region this year gave an extra boost in the month just in in the beginning of the quarter. And are you able to quantify the positive user impact?
No. We we don’t report. We are happy with the with the overall growth in the quarter. It’s 7.3%, you know, overall like for like. So so we’re happy with with the overall growth.
And then then we we don’t report sales by month that comparisons are affected by factors as as weather, holidays, campaign, timing, and and and number of trading days. So we can see that sales was strong in the beginning of the quarter, but we are happy with the with the overall growth in the quarter. Yep. Fair enough. It’s it’s tricky to quantify exactly.
Another one on the gross margin. Since your balance sheet has improved, you’ve also start start talking more about cash discounts supporting your gross margin. And I was wondering if you could give us an idea of how your use of cash discount has developed in recent quarters, and and are there more savings to be had from this use of cash discount, please?
Helena, CFO, Big Mac Group: Yes. Absolutely. We have I would say that we have since we have a strong balance sheet and a fairly low CapEx, and they’ve been really focused on preparing for the high system as usual this year. We have started with the cost discount earlier. It has given us the flexibility to trigger it already at the ramp up while we normally have it more weighted towards the third quarter of the year.
But still, there are possibilities for further margin enhancing discounts. In general, volume drives possibilities for for these kind of improvements.
Carl Sandlin, CEO, Big Mac Group: Perfect. Thank you. And just could you remind us, were you getting any cash discounts in q two last year?
Helena, CFO, Big Mac Group: Yes. That’s not material.
Carl Sandlin, CEO, Big Mac Group: Alright. But in q three last year, savings from cash discounts were material. Right? Yes. Perfect.
I think that’s all for me currently. Thank you very much. Thank you, Daniel.
Operator: Thank you. As a reminder, to ask a question, please press star followed by one on your telephone keypad. We currently have no further questions. So I’ll hand back to Carl for closing remarks.
Helena, CFO, Big Mac Group: Well,
Carl Sandlin, CEO, Big Mac Group: thank you. Thank you a lot for your participation, and I hope we wish you a wonderful summer. And if not before, we are really looking forward to meeting you again after our third quarter. So thank you.
Operator: This concludes today’s call. Thank you for joining us. You may now disconnect your lines.
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