Dustin Group Ab · OMXSTO:DUST
Dustin Group Ab — Q4 2023 Earnings Presentation
32 slides from Dustin Group Ab's earnings presentation, Oct 11, 2023
Slide 1: Q4 2022/23
Q4 2022/23 October, 2023 dustingroup.com
Slide 2: Dustin at a glance
Dustin at a glance 280,000 hardware and software products… …primarily sold online… Net sales SEK Software and Services Dustin (B2B) Offline million ~18% Hardware: Clients Servers ~40% 25,000 20,000 15,000 Dustin Home (B2C) 10,000 Software: OS SaaS 5,000 0,000 Hardware Online ~82% Services: Financing
Slide 3: Rights issue to secure a flexible and optimised capital structure
Rights issue to secure a flexible and optimised capital structure for continued profitable growth Financial Highlights Net sales and adjusted EBITA margin Net sales was 5,088 (5,743) MSEK • Reported net sales growth was -11.4% • Sales growth burdened by approximately 8% due to expiry of the Danish S
Slide 4: Financial development – SMB
Financial development – SMB Stable margin development despite lower volumes Net sales and segment margin Net sales decline in SMB of 10.9% y/y • Organic growth of -11.8% 2 500 25% • Pending and cautious market development due to general economic uncertainty 2 000 20% 1,639 Segment margin Segment res
Slide 5: Financial development – LCP
Financial development – LCP Sales burdened by expiry of Danish contract and cautious market Net sales and segment margin Net sales growth in LCP of -11.6% y/y • Sales growth burdened by approximately 11% due to expiry of the Danish SKI contract and a major contract where net accounting has now been
Slide 6: Continued cost focus to compensate for slow market, currency effects and inflation
Continued cost focus to compensate for slow market, currency effects and inflation Total SG&A Q4 Average FTE’s per Quarter -227 (-9%) -3% 2.495 2.500 2.479 2.441 2.422 559 2.405 2.391 2.400 2.373 30 2.300 2.252 -8% 2.200 2.100 2.000 577 529 SG&A 1.900 FX 1.800 1.700 1.600 1.500 Q1 FY Q2 FY Q3 FY Q4
Slide 7: Improved net working capital towards target range
Improved net working capital towards target range Improved net working capital due to reduced inventory Net Working Capital • Net working capital was -36 MSEK (80), mainly due to lower inventory -0.2% -0.1% 0.5% • Inventory decreased by 353 MSEK to 987 MSEK (1,340), where the larger part 200 -0.5% -
Slide 8: Inventory level well ahead of target
Inventory level well ahead of target Inventory split Reduced customer-specific inventory • Inventory decreased further in the fourth quarter, compared to 1,610* the third quarter 1,470* 1,340* • Total inventory well below the targeted level of 1,100 MSEK by 1,259* year-end 1,220* 1,138* • Core inven
Slide 9: Cash flow and Investments
Cash flow and Investments Positive cash flow from operating activities Changes in Cash Flow Y/Y • Cash flow from operating activities, before changes in working capital, was 164 (212) MSEK, due to lower EBIT and higher paid interest • Cash flow from changes in working capital was -141 (-108) MSEK, m
Slide 10: Overview of rights issue
Overview of rights issue Summary Preliminary timetable • Fully guaranteed rights issue with preferential rights for Announcement of complete terms and existing shareholders 7 November 2023 conditions • Size: approximately SEK 1,750m Extraordinary General Meeting to resolve 10 November 2023 to amend
Slide 11: Rights issue to secure a flexible and optimised capital structure
Rights issue to secure a flexible and optimised capital structure for continued profitable growth Use of proceeds Change in leverage post rights issue • The purpose of the Rights Issue is to ensure a flexible and optimised capital structure and strengthen the balance sheet by reducing the net debt a
Slide 12: Re-focus on business operations and strategy to improve margins and growth
Re-focus on business operations and strategy to improve margins and growth 1 Deleverage 2 Margin 3 Growth • Deleverage is of highest focus • Cost focus and synergy • Continued growth ambitions in • Strong cash-flow and net extractions according to plan line with financial targets working capital dev
Slide 13: Summary of financial year 2022/23
Summary of financial year 2022/23 Cautious market impeding growth and margin trend Net sales declined 0.1% to 23,577 (23,601) MSEK • Group organic net sales growth of -5.0% in constant currency • Organic growth in SMB of -10.5% and in LCP of -2.6% Gross profit of 3,409 (3,458) MSEK and gross margin
Slide 14: Corporate presentation
Corporate presentation C Dustin
Slide 15: Dustin at a glance
Dustin at a glance 280,000 hardware and software products… …primarily sold online… Net sales SEK Software and Services Offline Dustin (B2B) million ~18% ~40% Hardware: Clients 25,000 Servers 20,000 15,000 Dustin Home (B2C) 10,000 Software: OS SaaS 5,000 0,000 Hardware Online ~82% Services: Financing
Slide 16: Long and strong history of profitable growth
Long and strong history of profitable growth 1984 – 2006 2007 – 2014 2015 - 2020 2021 Nordic expansion and IPO and Strategy for European Founders phase - mail order sales of B2B hardware and development of online platform additional services continued growth expansion 24 22 20 18 16 Net sales (BnS
Slide 17: Dustin – the aggregator and destination
Dustin – the aggregator and destination Dustin services LCP (Large Corporate and Public) Hardware, software & services ~10,000 Distributors SMB (Small and Medium Sized Businesses) List 5 Rows ~120,000 Dustin products B2C (Business to Consumer) ~350,000 A large number of suppliers… needs an aggregato
Slide 18: Multi-channel approach to drive growth and margins
Multi-channel approach to drive growth and margins Customer needs Product portfolio Three tiered Customer needs Basic Medium Advanced sales model Basic Medium Advanced Stand-alone services and Consultative solutions sales Offline ~40% of net sales Cloud solutions MPS1) Higher gross margin Advanced p
Slide 19: A unique space
A unique space High ERP implementation Atea Accenture Strategic IT consultancy Crayon Advania Integrated solutions Degree of value added service On-site services Small IT Dustin’s position Product-near services infrastructure and service companies High IT knowledge Fast and reliable delivery Komplet
Slide 20: Our opportunity in services
Our opportunity in services Opportunities and strengths Our way forward • The standardisation of our • Services are primarily sold in service offering creates an a relational, analogue, non- opportunity for economies of standardised and non- Digital scale through central and scalable way efficient p
Slide 21: High growth position in a large market
High growth position in a large market B2B addressable market size by segment, bnSEK Hardware Software Services Nordics +7% p.a. Market trends that define how we work 327 +8% p.a. 251 134 186 106 Increasing online sales 79 103 48 72 59 73 90 Growth of mobility and cloud services 2017 2021 2025 Benel
Slide 22: Updated financial targets
Updated financial targets EPS Growth Leverage >10% 2.0-3.0 Net debt/EBITDA 3-year average annual growth rate Unchanged CO2 emission Dividend Policy 25% reduction >70% in C02e/MSEK Net Sales in the coming 3-year period. Dividend policy pay out of net profit depending on the financial position Towards
Slide 23: Integration and synergy extraction on track
Integration and synergy extraction on track with full effect expected in FY23/24 Executed Current status Plan Expected financial status Activities Financial ~70 One way of working Online excellence and branding SMB Benelux (EBITA 40-60 MSEK) Synergies Revenue Launch of Dustin web store Hassle free c
Slide 24: Synergies drive SMB margin development
Synergies drive SMB margin development Pricing excellence & global procurement FY25/26 Strengthen sales mix ~0.2% p.p. of Invest in growth ~0.3 p.p. of margin margin expansion Negative impact of Segment margin General scalability and expansion ~-0.3 p.p. efficiency >6.5% Improve data driven ~0.3% p.
Slide 25: LCP margin development drivers
LCP margin development drivers Global procurement Mix of sales ~0.1 p.p. of margin FY25/26 Contract optimisation ~0.1 p.p. of margin expansion General scalability and ~0.2 p.p.of margin expansion efficiency Segment margin expansion ~0.2 p.p. of margin >4.5% Global procurement expansion scaling on hi
Slide 26: One IT Platform enables cost synergies
One IT Platform enables cost synergies and is key for building the European IT powerhouse One IT Platform One Dynamics One Web Experience One Service Management One Data Platform ERP & CRM Portals & Open Web ConnectWise & Service Business Intelligence & Data Management Innovation Our future platform
Slide 27: Reducing NWC to between -100 and -200
Reducing NWC to between -100 and -200 Actions to reduce NWC will lead to… … reduced inventory levels and… 1,610* 1,340* What ~1,100* 1 019 Leveraging on our new organizational structure and 887 ~600 combined size 157 ~150 146 408 Moving from old way of procuring towards “just-in-time” 332 ~350 p
Slide 28: Our 2030 commitments
0 CO2 Our 2030 commitments Climate impact Zero carbon emissions across the value chain 100% Circularity To be fully circular 100# Social Equality With our colleagues, customer, partners and suppliers Commitments are designed to redefine the impact List 5 Rows of our business, how we behave and how w
Slide 29: Committed to long-term sustainable growth
Committed to long-term sustainable growth Trends Today Potential Climate reduction increasingly important Launch of in-house takeback Sell refurbished products online in procurement Advantage in tenders Use data to help customers make Demand for circular products and sustainable choices
Slide 30: Our path to decrease our CO2 impact
Our path to decrease our CO2 impact Our main levers – share of total improvement Expanding services such as managed 25% reduction in CO2e/ MSEK Net Sales until FY25/26 services and takeback. ~25% 61 100% Promoting solutions and products with lower 1 433 679 t CO2e, negative environmental impact to a
Slide 31: Our mission, vision, guiding direction and promise
Our mission, vision, guiding direction and To provide the right IT solution, to the right customer and user. promise Mission At the right time. At the right price. Vision To help our customers stay in the forefront Guiding direction Enabling the circularity movement List 5 Rows Promise We keep thing
Slide 32: Thank you
Thank you © Dustin