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Latest report (2019-04-18)Annual Report 2018

Byggmax Group in short

Byggmax Group consists of Byggmax, Skånska Byggvaror and Buildor. The first Byggmax store opened its doors in 1993 and 17 years later, in 2010, the Byggmax Group’s share was listed on the Stockholm stock exchange. Buildor was acquired in November 2015, followed shortly after by the acquisition of Skånska Byggvaror in January 2016


Byggmax Group has established a strong  market  position in the Nordic DIY market, and the aim is to continue growing with good profitability This will be achieved by a simple, efficient operating model and focused growth based on our strengths in store expansion, online shopping and product range development.

 

About Byggmax

Since its launch in 1993 Byggmax has established itself in both Norway and Finland. There are now  134 Byggmax stores distributed over these three countries and the number is growing each year. Right from the start the Byggmax business concept has been to be the best and least expensive option when consumers wish to buy high-quality building materials. With a drive-in system where customers can load their items into their car themselves, a visit to Byggmax is always simple and efficient.


Byggmax positioned itself at an early stage as a clear low-price option - by consistently offering quality products at a low price, regardless of whether the customer does carpentry as a hobby or is a professional. Previously Byggmax has focused on a limited product range to always be able to provide the items that are most in demand for the most common DIY projects. With rapidly expanding e-commerce, a supplementary range is now available, allowing the customer to find everything imaginable for projects in the home.

Karta 2017

About Buildor

Buildor.se has been a part of the Byggmax family since October 2015. Buildor.se was launched in 2013 with the goal of making it easier and more pleasant to shop for building supplies. Buildor offers a broad range of varied product categories at the market’s most competitive prices for building supplies and interior fittings online. It is just as important for us to provide fast and personal customer service as it is to ensure our employees have the requisite expertise regarding the products’ function and accessories to be able to help customers in the most effective way. Another equally important aspect is offering lightning-fast deliveries, which is something Buildor is known for. During the end of 2016, Buildor was launched in the Norwegian market, Buildor.no.


Read more at buildor.se

 

About Skånska 

Skånska Byggvaror has been a part of the Byggmax family since January 2016. Skånska Byggvaror was founded in 1965 and is an online Nordic distance retailer of value-added building products for the DIY market.

 

With internal product development and carefully selected suppliers, Skånska Byggvaror creates attractive products sold under its own brands. The path from idea to launch is and has always been short. This gives Skånska Byggvaror unique control over the assortment, in areas including quality, design and value. Since 2012, Skånska Byggvaror has successfully sold its products in Norway through the Grønt Fokus brand.


Read more at skanskabyggvaror.se

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Vision and business concept

Byggmax

Vision
The Byggmax vision is to be number one in the market for DIY enthusiasts.

Business concept
The business concept is to retail building supplies and other products to DIY
enthusiasts at the lowest price. Shopping at Byggmax should be cheap, quick,
easy, and friendly!

Byggmax's concept and business model

Below is a description of the Byggmax concept:

  • Low prices and a focused range: Byggmax sells building supplies and other products to DIY enthusiasts. Our products have a high level of quality at the lowest possible price. All customers receive the same low price. A limited range of 3,000 products simplifies administration and procurement. In addition Byggmax offers a larger and expanding range of products, ordered from our online shop
  • Drive-in and inexpensive store locations: In our drive-in model, customers pack their goods directly into their vehicles, thus lowering our costs. The stores are located in suburbs, in locations with easy access for customers with vehicles
  • Constant improvement: We challenge every process to enhance efficiency and to improve operating profits in all our areas of operation
  • Strong corporate culture and cost focus:The foundation of Byggmax’s corporate culture is a genuine entrepreneurial spirit. The store managers and all employees feel pride in their own areas of responsibility. This means staying on top of costs and maintaining a focus on key performance indicators to perform well. All head office personnel work at least once per year out in the stores to maintain their links to store operations.
  • Customer-oriented website: The focused product range and the limited time for providing in-store advice, which enable our low costs, are complemented digitally by our website. Detailed instructions are available there for most DIY projects as is an expanded product range that currently comprises more than  30,000 items and which is continually expanding.

 

Business model

Byggmax stores in Sweden, Norway and Finland offer affordable high-quality products for the most common maintenance and DIY projects. The primary target group is consumers and the product range encompasses standard building  materials, such as lumber, insulation, sheets and boards as well as paint — at the same low price regardless of whether the customer is a professional or a private consumer. With its focused range, Byggmax handles large volumes and can obtain economies of scale in purchasing and logistics

Since the company was founded in 1993, its operations have been conducted in accordance with the Byggmax concept, which has been essential to the company’s development. The concept is based on a focused product range, a resource-efficient organization, a strong corporate culture and effective pricing strategy, as well as the characteristic design of the stores.

Today, Byggmax has a strong market position, an extensive store network and a recognized brand

Byggmax does not own any factories, instead purchasing goods from independent suppliers primarily in the Nordic region, though also from other European countries and Asia. Byggmax does not own the stores either; it leases store premises from international and local landlords

Operations are managed from the service office in Solna, Sweden. The company’s business model serves as a platform to generate continued organic growth through both the expansion of the store network and increased comparable sales per store. Byggmax has a large economic impact. During the year, Byggmax had about 1,000 employees who made many people’s building dreams a reality.

 BM Affarsmodell Eng

The picture above refers only to Byggmax business model.

Financial goals and strategies

Byggmax’s solid business model and the healthy conditions in the Nordic DIY market mean that Byggmax is well placed for continued growth, both organically through the establishment of new stores, and through continued growth in sales in comparable stores.

Byggmax’s financial targets

Byggmax has established the following long-term goals for the Group: :

• Organic sales growth of 10 to 15 percent per year

• The EBITDA margin should be 9 to 10 percent per year

Distribute at least 50 percent of net profit  


Follow-up of goals

Follow-up of targets

Byggmax net sales grew by 2.0 percent in 2017. The Byggmax segment has come furthest in implementing the new strategy. The Byggmax segment increased sales by 4 percent, captured market share and achieved its highest profitability in five years. Byggmax Online also turned around into profitability during the year. Skånska Byggvaror net sales decreased by 11 percentage points in 2017, and the EBITDA margin excluding non-recurring costs decreased drastically. Skånska Byggvaror’s financial development has been impacted by challenging comparative figures, price and mix effects, and previously reduced investments in product development. Buildor continued to grow strongly during the year, while profitability improved. For follow-up of environmental objectives, refer to the Environmental Report.

The EBITDA margin including non-recurring items amounted to 8.4 percent. Earnings were negatively impacted by restructuring costs of SEK 32.3 M for Skånska Byggvaror, for the purpose of focusing on the Garden Living core operation and of reducing operating costs. To increase profitability in Finland, Byggmax closed four stores in 2017 and will open one store in the spring of 2018, all in accordance with the new strategy being implemented. As a consequence of closing the four stores, results were impacted by a non-recurring cost of SEK 30.9 M.  In addition, earnings were positively affected by reversal of  the Buildor earnout of SEK 33.4 m. Excluding non-recurring items, the EBITDA margin totaled 8.9 percent..

Tillvaxt 1 2 ENG

Byggmax posted average annual net sales growth of 9.8 percent during the 2010–2017 period.

Tillvaxt 2 2 ENG

Byggmax posted average annual EBIT growth of 6.7 percent during the 2010–2017 period. In 2010, the EBIT margin was impacted by listing costs. The EBIT margin amounted to 8.3 percent in 2015 excluding acquisition costs. Skånska Byggvaror was acquired on January 4, 2016 and consolidated into the Group from January 1, 2016. Earnings in 2016 were impacted by the revaluation of the earnout (SEK 112.3 M) linked to Skånska Byggvaror Group AB and Buildor AB. 2017 earnings were affected by non-recurring items for the closing of four Byggmax stores in Finland (SEK 30.9 M) and non-recurring items for the restructuring of Skånska Byggvaror (SEK 49.4 M).

 

Strategies for achieving the targets

The Byggmax Group launched an updated strategy in June 2017. The updated strategy is based on the attractive position the company currently holds in a good market, and on a number of unique strengths:

 

  • Byggmax a strong brand that holds the low-price position
  • A unique store format, close to customers and featuring self-service
  • A strong e-commerce position
  • The lowest costs in the industry
  • Ability to deliver growth
  • Strong culture of cost awareness and entrepreneurship

 

The future strategic orientation is based on two cornerstones: a simple, efficient operating model, and focused growth is based on our strengths in store expansion, online shopping and product range development.

 

Simple and efficient operating model

The Byggmax Group works on continual improvement. This entails, for example, improving operations by further expanding its use of economies of scale at its purchasing function by handling larger product volumes and through procurement from low-cost countries. The organization will enhance its resource-efficiency by implementing continuous business process improvements and reducing overheads. Furthermore, Byggmax will capitalize on newly opened stores becoming more profitable once they reach maturity and on increasing sales in already well-established stores.

During 2017, the Byggmax Group also implemented a number of specific measures to increase efficiency and profitability. These include terminating the Design Your Living concept and sales channels to professional purchasers, restructuring the store network in Finland and launching a transformation of Skånska Byggvaror from building materials retailer to a niche competitor in Garden Living (sun rooms, garden buildings, greenhouses, etc.).

Focused organic growth

The Byggmax Group will deliver focused growth in three main areas

  • New shops: grow to an identified potential of 210 stores in current markets (Sweden, Norway and Finland) and   in addition test a smaller Byggmax format for profitable growth in smaller localities – a segment representing 20 percent of the market that currently has a low level of Byggmax presence. The smaller format was launched in two new stores in Sweden this summer: Mariannelund (July) and Kalix (August).

Number Of Stores

The diagram illustrates the development of the number of stores since the beginning in 1993. During the past four years, Byggmax has opened an average of eight new stores every year.

 

  • Online store: Byggmax launched online shopping back in 2008 and currently occupies a unique position with the possibility of gaining in online shopping moving forward. This, given the strong Byggmax brand, a strong position in the low-price segment, a broad online product range and the possibility of using the Byggmax store network to create efficiency in logistics and an omnichannel experience for customers. Byggmax aims to profitably grow faster than the online market.
  • Product range development: In addition to continually upgrading its product range offering, Byggmax has developed a Byggmax concept for gardening products. The concept is built on Byggmax’s strengths: a store format with a drive-in and ease of shopping, a focused product range with quality products and the lowest possible prices. The gardening concept was tested in two shops in Sweden this summer: Borlänge (June) and Vellinge (July).

 

 

 

Organisation

Byggmax organisation changes as from April 15, 2017.

Byggmax has a resource-efficient organisation with the majority of business activities centrally managed. Aside from the sales force, which is based in Byggmax stores, most business processes are managed from the service office in Solna, Sweden, functionwide across all brands and stores, which promotes efficiency and the economies of scale that characterize the Byggmax business model. Byggmax’s organizational structure is presented below:

Value Drivers

Value drivers are factors that affect the development of Byggmax in the short and long term. The following are the most relevant according to management assessments. Many factors impact operations in both the short and long term and, as such, are listed under the category where they are considered to have the greatest impact.

Short-term factors
• Trends in purchasing prices – purchasing prices affect Byggmax’s margins. Historically, the market has passed on adjustments in purchasing prices to the customer.
• Competitors’ pricing – Byggmax pricing strategy is based on underpricing the competition with the aim of being the cheapest. Therefore the competition’s pricing affects margins.
• Short-term trends in the DIY market – Byggmax operates in the DIY market and, accordingly, its trends impact the company
• Weather – Byggmax sells a substantial amount of products for outdoor use, which is why sales are impacted by weather conditions. 
• The availability of attractive store locations – the establishment of new stores forms a key element of Byggmax’s strategy both in the short and long-term, and therefore the availability of new store locations is important.

Long-term factors
• The ability to maintain the strong corporate culture – the Byggmax culture has played an important role in the company’s success, and retaining this culture is a key factor.
• The ability to implement the company’s strategy and business concept – maintaining stringency throughout the range and pricing, as well as continuously tuning the organization through constant improvement are a few of the keys to success.
• The ability to renew concepts and strategies when needed – the Byggmax concept has remained true to the original since the beginning. However, the concept has developed over time and new ideas have been tested and incorporated or discarded.
• Long-term development of the DIY market – Byggmax operates in the DIY market and is thus impacted by market trends.
• Trends in the attractiveness of the low-price segment in the DIY market – Byggmax’s operates in the low-price segment. Trends in the long-term development of this sector are therefore importan. Trends in the long-term development of this sector are therefore important.
• Strategies of the competition and their implementation thereof – Byggmax operates in a competitive market and the actions of the competition affect the company.

•Trend in demand for sun rooms — Sun rooms represent an important product group for Skånska Byggvaror, one of the companies in the Byggmax Group.

• E-commerce trend in building supplies — E-commerce comprises a significant portion of Byggmax’s sales and is an area in which the Byggmax Group is investing.

• Sustainable development – Sustainability is important for Byggmax,
and it impacts the Group’s decisions.

 

 

Competitors

Byggmax’s competitors are other retail chains, online stores and purchasing organizations, as well as independent stores.

The Swedish market
The Swedish market has been dominated by Beijer  and local DIY retailers, but the international chains and,  above all, Byggmax are the companies growing rapidly. Many international chains, for example Bauhaus and K-rauta, are expanding.

The Norwegian market
The Norwegian market is dominated by a few strong chains with Byggmakker as the market leader. These chains sell to private consumers and the trade. Other competitors include Maxbo, Coop Bygg and Bygger’n.

The Finnish market
The market in Finland has been dominated by Rautakesko, with its K-rauta concept. In recent years, the only international chain to establish operations in Finland has been Bauhaus. Other competitors in Finland include Starkki, and SGroup.