Slide 1: Summary Q3 2023
Summary Q3 2023 October 27, 2023 Jonas Hasselberg CEO and President jonas.hasselberg@proact.eu Linda Höljö CFO www.proact.eu linda.holjo@proact.eu
Slide 2: Agenda
Agenda • Proact introduction • Proact’s market • Key developments • Financial results • Summary Jonas Hasselberg Linda Höljö CEO and President CFO
Slide 3: Who is Proact
Who is Proact FI NO 1994 Almost 3 decades of helping customers drive SE business value and growth – through IT EE LV DK 4 000 Medium and large enterprise UK NL customers across Europe BE DE CZ 5 000 Million SEK turnover with stable finances. Listed on Nasdaq Stockholm since 1999 1 200 Employees with
Slide 4: Businesses across all industries are in state of transformation
Businesses across all industries are in "state of transformation”. Data is the key to this transformation. The four defining growth trends in the market - Business: Focus on digital transformation and business innovation through IT - Technology: The use of hybrid cloud to increase speed, flexibility
Slide 5: Value to customers via our propositions
Value to customers via our propositions
Slide 6: Our hybrid-cloud model enables the best of the cloud worlds
Private Public Managed Our hybrid-cloud model enables the best of the cloud worlds On-premises infrastructure
Slide 7: The infrastructure sits in one of three places
The infrastructure sits in one of three places Customer data centre Hyper-scaler data centre Proact data centres
Slide 8: #ThePowerOfData
Faster digitalisation Any & devops application. Anywhere. Self- service and automation Flexible & agile scalability Modern workspace Start utilising the advantages with Hybrid cloud private hosted public Customer data centre Hyper-scaler data centre Proact data centres #ThePowerOfData
Slide 9: The hybrid cloud journey
PROACT The hybrid cloud journey We help you fi r Business and IT alignment ABaqeNS We help you uonequausyduu| fe, fe 4 Scurits Public cloud Hosted cloud location | Dedicate A 5 We help you fc y @Support @Monitor @Manage @Secure suoneledo
Slide 10: Strong hybrid cloud offerings
Strong hybrid cloud offerings Customer data centre Hyper-scaler data centre Proact data centres Storage Proact Hybrid Cloud CloudOps 4 Azure Networking Proact Managed Containers CloudOps 4 Workspace Compute Immutable Storage CloudOps 4 Virtual Workspace Service Management Next Gen Firewall CloudOps
Slide 11: Launching Industry Solutions
Launching Industry Solutions
Slide 12: Supporting Sustainability and Resilience
Supporting Sustainability and Resilicence
Slide 13: Key developments in Q3
Key developments in Q3 • Cost program executed as per plan with improved Gross Margins and lower Sales & Administration costs • Named one of Sweden's 10 best companies for young talent, again • For two consecutive years, Proact Sweden wins the top three categories at NetApp's annual Partner Award ev
Slide 14: Quarter 3 in brief
Quarter 3 in brief + 7% organic service revenue growth – TCV at 119* (158) MSEK + 18% ARR growth to 1,747 MSEK – EBITA decline of -7% to 72.8 MSEK + Increased gross margins 23.5% (22.5%) – 3% revenue decline + Cost efficiency program showing results *excluding new or extended contracts with variable
Slide 15: Financial development
Financial development
Slide 16: Income Statement – Highlights Q3 2023
Income Statement – Highlights Q3 2023 TOTAL REVENUE SYSTEM SALES SERVICES SALES GROWTH MSEK GROWTH MSEK GROWTH MSEK -3% 1,065 -17% 524 15% 541 Adj. EBITA PROFIT BEFORE TAX GROWTH MSEK Margin GROWTH MSEK Margin -7% 72.8 6.8% 14% 63.7 6.0%
Slide 17: Revenue development
Revenue development Revenues Key developments in the third quarter • Revenue growth -3% (-8% organically) • Strong comparison quarter • Some markets with longer sales cycles and impact from macroeconomic uncertainty • Acquisitions contributing -0,4% (sale of Proact Lithuania) and currency effects 6%
Slide 18: Profitability development
Profitability development Adjusted EBITA Key developments in the third quarter • Adjusted EBITA of SEK 72,8 million (78,3) • Decrease of 7% • Margin of 6.8% (7.1) • Gross margin increased • Increase both for systems and services • Service margins impacted positively by cost program and earlier effic
Slide 19: BU Nordics & Baltics
BU Nordics & Baltics Revenues Key developments in the third quarter • Revenue increased 3.5% (2% organically) • Systems decreased 2% (organically 3%), primarily due to strong comparison quarter • Services increased 17% (organically 14%), with good growth in all areas • EBITA margin increasing to 10.
Slide 20: BU UK
BU UK Revenues Key developments in the third quarter • Revenue decreased with 15% (24% organically) • Systems decreased 45% (organically 51%) due to strong comparison quarter and longer sales cycles • Services increased 24% (organically 11%) • Growth in cloud services due to previously won contracts
Slide 21: BU West
BU West Revenues Key developments in the third quarter • Revenue growth 7.5% (3% organic decrease) • Systems decreased 12.5% (22% organically) • Services increasing 13% (2% organically) • Support services showing good growth due to won contracts, while consulting revenues decreasing primarily due to
Slide 22: BU Central
BU Central Revenues Key developments in the third quarter • Revenue decrease by 14% (organically 23%) • Systems -41% (organically 47%) • Services growth of 13% (organically +2%) • Slower systems market due to macroeconomic uncertainty and prolonged sales cycles • Organic growth in services, especial
Slide 23: Cash flow in Q3
Cash flow in Q3 • Positive cash-flow from current operations before Liquid Funds June 30, 2023 443 change in working capital Cash-flow from current operations 133 • Positive change in working capital Current operations 103 Change in working capital 29 • Reduced receivables, partly offset by reduced
Slide 24: Cash flow January – September 2023
Cash flow January – September 2023 • Positive cash-flow from current operations before Liquid Funds Dec 31, 2022 506 change in working capital Cash-flow from current operations 292 • Small positive change in working capital Current operations 280 Change in working capital 12 • Investment in fixed as
Slide 25: Balance sheet
Balance sheet 2023 2022 2022 • Equity ratio of 27% (MSEK) Sep 30 Dec 31 Sep 30 • Cash position of SEK 429 million Total Assets 3,753 4,242 3,682 whereof Goodwill 1,014 984 991 • Net debt, including leasing liabilities of SEK whereof Intangible fixed assets 197 231 253 82 million whereof Accounts rec
Slide 26: Financial goals
SALES GROWTH FINANCIAL TARGET OUTCOME SEK 4 927 million in sales rolling 12 months GOALS >10% 15.7% Rolling 12 months EBITA MARGIN TARGET OUTCOME* Minor decrease from 6.6% FY2022 8% 6.4% NET DEBT/EBITDA TARGET OUTCOME* <2 0.17 Significantly better than target ROCE TARGET OUTCOME Decreased from FY202
Slide 27: Summary
Summary • Strong services growth • Continued growth in Annualised Recurring Revenue (ARR) to 1,747 MSEK • 1,479 MSEK in Q3 2022 • 1,679 MSEK in Q2 2023 • Results from cost efficiency program visible in gross margins and SG&A positioning Proact well for coming quarters
Slide 28: Thank you
Thank you www.proact.eu