BHG announced 21 March 2023 an estimated negative adjusted EBIT in the range of SEK -70 million to -105 million for the first quarter of 2023. Based on preliminary numbers, BHG complies with the financial covenants for the first quarter of 2023.

BHG describes the following in the Directors’ report in the Annual Report, under Financial risks and uncertainties:

“As previously stated, BHG considers the market conditions during 2023 to continue being challenging, particularly during the first six months of the year. A weak demand and large levels of inventory put pressure on prices and consequently also on the Group’s profitability. It can therefore not be precluded that the profitability could reach a level whereby BHG would risk not meeting the financial covenants in the Group’s credit facilities.

During the year, BHG has renegotiated and been granted time limited reliefs from these covenants by the Group’s lenders. The reliefs are in effect as of September 30, 2022 until December 31, 2023 and result in a lowering of the lenders’ demands on leverage ratio and interest coverage ratio during this period. As of December 31, 2022 the Group used SEK 2,000 million of a total available amount of SEK 3,300 million in the credit facilities. As of the same date, the Group had cash and cash equivalents of SEK 477.6 million consisting of bank deposits.

If the Group breach its financial covenants, the credit facilities become due for payment. With reservations for uncertainties in levels of demand, the Group’s focus on reducing costs and lowering inventory levels is considered to generate sufficient profitability and cash flow to ensure that the Group meet the conditions in the financial covenants. Furthermore, even if the financial covenants are breached, the Board of Directors considers the possibility to access financing to ensure continued operations to be strong, although access to such financing may come at a higher cost. BHG has a good relationship and dialogue with its financing banks to seek and find constructive solutions. The financial statements have therefore been prepared on a going concern basis. However, if none of the solutions described above can be implemented successfully, there is an uncertainty regarding the financing of the Group during 2023.”

The Auditor’s report includes, without qualifying their opinion, a special paragraph regarding material uncertainty related to going concern if the Group breaches its financial covenants and the credit facilities become due for payment.

BHG is in silent period ahead of the report for the first quarter 2023, to be released on 27 April 2023.

The annual general meeting of BHG will take place 3 May 2023 in Malmö as per separate notice.