Atea Asa · OSL:ATEA
Atea Asa — Q3 2019 Earnings Presentation
41 slides from Atea Asa's earnings presentation, Oct 18, 2019
Slide 1: Q3 2019 Presentation
Q3 2019 PRESENTATION 18 October 2019
Slide 2: Highlights – Q3 2019
Highlights – Q3 2019 Strong growth in revenue and EBIT in Q3 2019, with increased sales across all lines of business Revenue of NOK 7.8 billion (up 10.3%) ‒ Hardware revenue grows by 3.8% ‒ Software revenue grows by 36.6% ‒ Service revenue grows by 6.3% EBIT of NOK 181 million (up 37.3%) ‒ Higher re
Slide 3: Norway
Norway Growth in service revenue offset by lower product margins REVENUE EBIT +2.4% -6.6% 83 Product revenue -0.3% 2,144 2,195 77 NOK in million Service revenue +12.3% NOK in million Gross profit +3.1% Operating expenses +5.0% Q3 18 Q3 19 Q3 18 Q3 19
Slide 4: Sweden
Sweden EBIT growth driven by higher sales of software and services, and tight control of operating expenses REVENUE EBIT +7.5% +16.4% Product revenue +7.5% 3,262 131 3,036 112 Service revenue +7.3% SEK in million SEK in million Gross profit +1.2% Operating expenses -1.7% Q3 18 Q3 19 Q3 18 Q3 19
Slide 5: Denmark
Denmark Strong growth in product revenue and lower operating expenses drive EBIT improvement REVENUE EBIT +23.6% + 24MDKK Product revenue +36.7% 1,270 Q3 18 Q3 19 1,028 Service revenue -7.6% DKK in million DKK in million -15 Gross profit +2.4% Operating expenses -6.0% -39 Q3 18 Q3 19
Slide 6: Status of business recovery in Denmark
Status of business recovery in Denmark Comparison of Atea Denmark P&L Q3 2019 vs. Q3 2017 (last profitable Q3) CURRENCY: MDKK Q3 19 Q3 17 Difference Products 989 945 44 Services 281 371 -90 • Product business has recovered to Q3 2017 levels Revenue 1,270 1,316 -45 • Opex is below Q3 2017 levels, wit
Slide 7: Finland
Finland Rapid growth in revenue and EBIT, based on increased service revenue REVENUE EBIT +7.2% +34.1% Product revenue +5.2% 72 1.3 67 1.0 Service revenue +29.0% EUR in million EUR in million Gross profit +18.3% Operating expenses +16.5% Q3 18 Q3 19 Q3 18 Q3 19
Slide 8: Baltics
Baltics Revenue growth offset by higher personnel costs REVENUE EBIT +3.1% -32.2% Product revenue +3.6% 26 27 0.8 Service revenue +1.9% EUR in million EUR in million 0.6 Gross profit +3.8% Operating expenses +8.6% Q3 18 Q3 19 Q3 18 Q3 19
Slide 9: Net debt
Net debt Net debt of NOK -889 million at the end of Q3 2019 (Net Debt / EBITDA of 0.7*) Cash flow from operations of NOK -434 million during Q3 2019 1,926 Cash flow is highly concentrated in Q4 based on seasonal fluctuations in working capital balance throughout year NOK in million Securitization pr
Slide 10: Information Management, Digital Workplace, Hybrid Platforms
Information Management Digital Workplace Hybrid Platforms
Slide 11: Reseller, Integrator, Service Provider
#1 #1 #1 Reseller Integrator Service Provider Life Cycle Management Professional Services Managed Services
Slide 12: New Atea logistics center opened in June 2019
New Atea logistics center opened in June 2019 21.000 square meters of warehouse capacity, with highly automated inventory processing Production capacity more than doubles with limited increase in resource requirements Highest security level Carbon neutral production
Slide 13: Cloud accelerates business transformation
Cloud accelerates business transformation Innovate with the latest technology from any source Access more types of data, analytics & AI, anywhere Improve return on existing investments Yet less than 20% of workloads have moved. Why?
Slide 14: IBM accelerates modernization
What’s preventing modernization of the IBMremaining 80%? accelerates modernization Unique workload needs – compliance, security, Private clouds SaaS Public clouds Dedicated location - requires more choice Clouds Clouds & SaaS clouds Multiple clouds & vendors – hard to connect / manage across clouds
Slide 15: Atea revenue growth by line of business
Atea revenue growth by line of business Annual revenue growth rate by business line: 2016 – 2019 YTD 25% Average rate of annual revenue growth: 20% Hardware: 5.4% 15% Software: 16.8% 10% Services: 4.8% 5% 0% 2016 2017 2018 YTD 2019 Hardware Software Services
Slide 16: Hybrid, multicloud gives opportunities, as well as challenges
Hybrid, multicloud gives opportunities, as well as challenges $438B in 2020 $609B in 2020 18-20 CAGR 15% 18-20 CAGR 18% A real world look at multicloud Private Public Clouds Dedicated Share of enterprise customers Clouds & SaaS Clouds 94% using multiple clouds Share of enterprise customers using mor
Slide 17: Role of AppXite in Atea's business
Role of AppXite in Atea’s business A system where our customers can procure, track and self-administer their cloud usage In a Hybrid Multi Cloud world this is complex and the complexity will only increase We want to provide a solution for our customers where we are not locked in to a third party ven
Slide 18: Summary – Q3 2019
Summary – Q3 2019 REVENUE Revenue of NOK 7.8 billion, up 10.3% NET PROFIT Net profit of NOK 135 million, up 47.5% Net debt of NOK 889 million EBIT EBIT of NOK 181 million, up 37.3% NET DEBT (0.7 x EBITDA*) * Net debt and EBITDA as defined in Atea’s loan covenants. EBITDA for last 4 quarters, adjuste
Slide 19: Q3 2019 Fact Pack
ATCR gaz FACT PACK
Slide 20: Highlights – Group
Highlights – Group Q3 Q3 YTD YTD Full year NOK in million 2019 2018 2019 2018 2018 Group revenue 7,829 7,098 26,455 24,537 34,709 Group margin 1,756 1,682 5,600 5,408 7,536 Gross margin (%) 22.4% 23.7% 21.2% 22.0% 21.7% EBIT 181 132 442 382 690 EBIT margin (%) 2.3% 1.9% 1.7% 1.6% 2.0% Net profit 135
Slide 21: Consolidated statement of financial position – Group (1)
Consolidated statement of financial position – Group (1) NOK in million 30 Sep 2019 30 Sep 2018 ASSETS Property, plant and equipment 1,441 598 Right-of-use assets 892 104 Deferred tax assets 404 460 Goodwill 3,855 3,703 Other intangible assets 231 224 Long-term subleasing receivables 79 0 Other long
Slide 22: Consolidated statement of financial position – Group (2)
Consolidated statement of financial position – Group (2) Right-of-use assets NOK in million 30 Sep 2019 30 Sep 2018 ASSETS Right-of-use assets - Buildings and property 665 0 Right-of-use assets - Computer equipment 78 96 Right-of-use assets - Motor vehicles 149 8 Total right-of-use assets 892 104
Slide 23: Full-time employees - Group
Full-time employees - Group FTEs, end of period 30 Sep 2019 30 Sep 2018 31 Dec 2018 Norway 1,687 1,621 1,678 Sweden 2,537 2,432 2,497 Denmark 1,459 1,535 1,515 Finland 409 347 356 Baltics 652 653 665 Logistics 250 224 237 Group IT 0 0 0 Atea Global Services 405 372 382 Atea ASA 12 10 10 AppXite 39 5
Slide 24: Financial performance actual – Segment
Financial performance actual – Segment NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Norway 1,901.4 2,004.4 2,143.7 2,687.7 2,442.4 2,178.3 2,195.1 Sweden 3,314.4 3,932.0 2,780.3 4,022.3 3,575.3 3,984.2 3,011.8 Denmark 2,011.3 2,306.3 1,318.9 2,389.6 1,870.9 2,339.9 1,680.5 Finland 873.9
Slide 25: Financial performance pro forma – Segment
Financial performance pro forma – Segment NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Norway 1,920.2 2,022.2 2,158.8 2,687.7 2,442.4 2,178.3 2,195.1 Sweden 3,314.4 3,932.0 2,780.3 4,022.3 3,575.3 3,984.2 3,011.8 Denmark 2,011.3 2,306.3 1,318.9 2,389.6 1,870.9 2,339.9 1,680.5 Finland 873
Slide 26: Income statement actual - Group (NOK million)
Income statement actual - Group (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 4,484.1 4,601.2 4,357.6 5,661.6 4,872.9 4,436.8 4,522.5 Software revenue 2,328.8 2,854.8 1,291.3 2,688.5 2,594.8 3,379.7 1,764.4 Products revenue 6,812.9 7,456.0 5,648.9 8,350.1 7,
Slide 27: Income statement pro forma - Group (NOK million)
Income statement pro forma - Group (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 4,490.5 4,604.3 4,360.3 5,665.2 4,872.9 4,436.8 4,522.5 Software revenue 2,328.8 2,854.8 1,291.3 2,688.5 2,594.8 3,379.7 1,764.4 Products revenue 6,819.3 7,459.2 5,651.6 8,353.7
Slide 28: Income statement actual – Norway (NOK million)
Income statement actual – Norway (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 1,065.1 1,178.9 1,331.7 1,617.5 1,315.6 1,172.0 1,247.5 Software revenue 377.7 349.8 356.7 537.5 613.7 452.2 435.2 Products revenue 1,442.7 1,528.7 1,688.4 2,155.0 1,929.3 1,624.2
Slide 29: Income statement pro forma – Norway (NOK million)
Income statement pro forma – Norway (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 1,065.1 1,178.9 1,331.7 1,617.5 1,315.6 1,172.0 1,247.5 Software revenue 377.7 349.8 356.7 537.5 613.7 452.2 435.2 Products revenue 1,442.7 1,528.7 1,688.4 2,155.0 1,929.3 1,62
Slide 30: Income statement actual – Denmark (DKK million)
Income statement actual – Denmark (DKK million) DKK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 835.7 806.0 572.8 959.3 804.5 728.4 701.5 Software revenue 405.0 612.5 150.9 500.5 304.1 756.6 287.6 Products revenue 1,240.7 1,418.5 723.6 1,459.8 1,108.6 1,485.0 989.1 Total se
Slide 31: Income statement actual – Denmark (NOK million)
Income statement actual – Denmark (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 1,080.9 1,033.6 735.3 1,237.8 1,050.1 947.7 926.7 Software revenue 523.9 786.8 193.0 645.8 397.0 985.5 382.4 Products revenue 1,604.9 1,820.4 928.4 1,883.6 1,447.1 1,933.1 1,309.
Slide 32: Income statement actual – Sweden (SEK million)
Income statement actual – Sweden (SEK million) SEK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 1,836.3 2,021.7 1,941.4 2,235.2 2,014.3 1,866.1 1,967.4 Software revenue 1,028.8 1,588.2 552.5 1,371.2 1,156.0 1,823.7 713.4 Products revenue 2,865.1 3,609.8 2,493.9 3,606.3 3,170
Slide 33: Income statement actual – Sweden (NOK million)
Income statement actual – Sweden (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 1,774.4 1,873.3 1,786.9 2,088.2 1,883.0 1,706.8 1,817.1 Software revenue 994.1 1,480.2 495.8 1,281.3 1,080.6 1,675.9 658.1 Products revenue 2,768.5 3,353.5 2,282.7 3,369.4 2,963.6
Slide 34: Income statement actual – Finland (EUR million)
Income statement actual – Finland (EUR million) EUR in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 39.8 36.3 37.1 47.9 43.5 44.5 38.1 Software revenue 43.8 23.8 24.3 20.9 50.6 25.6 26.5 Products revenue 83.6 60.1 61.4 68.8 94.1 70.2 64.6 Total services revenue 7.2 6.8 5.8 7.3
Slide 35: Income statement actual – Finland (NOK million)
Income statement actual – Finland (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 383.4 346.6 355.5 461.2 423.8 432.8 375.8 Software revenue 421.6 226.4 232.8 201.9 493.2 248.8 262.0 Products revenue 805.0 573.0 588.3 663.1 916.9 681.6 637.8 Total services rev
Slide 36: Income statement actual – Baltics (EUR million)
Income statement actual – Baltics (EUR million) EUR in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 16.6 16.1 15.6 25.8 19.4 17.7 15.1 Software revenue 1.9 3.1 2.5 5.7 3.1 3.0 3.7 Products revenue 18.5 19.2 18.1 31.5 22.6 20.8 18.8 Total services revenue 7.7 7.6 8.3 9.0 8.7 9.0
Slide 37: Income statement actual – Baltics (NOK million)
Income statement actual – Baltics (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 159.8 153.8 149.9 248.5 189.2 172.3 148.9 Software revenue 18.6 29.2 23.5 54.5 30.6 29.4 36.1 Products revenue 178.4 183.0 173.4 302.9 219.8 201.7 185.0 Total services revenue 73
Slide 38: Income statement actual – Group Shared Services (NOK million)
Income statement actual – Group Shared Services (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 1,165.7 1,213.1 1,311.0 1,431.7 1,439.0 1,353.5 1,510.7 Software revenue 0.7 0.7 0.7 1.2 0.9 0.3 0.5 Products revenue 1,166.3 1,213.8 1,311.7 1,432.9 1,439.9 1,353.
Slide 39: Income statement actual – AppXite (EUR million)
Income statement actual – AppXite (EUR million) EUR in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Software revenue 0.0 0.0 0.0 0.0 0.0 0.3 0.4 Products revenue 0.0 0.0 0.0 0.0 0.0 0.3 0.4 Total services revenue 0.5 0.4 0.4 0.4 0.6 0.4 0.5 Other inc
Slide 40: Income statement actual – AppXite (NOK million)
Income statement actual – AppXite (NOK million) NOK in million Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Hardware revenue 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Software revenue 0.0 0.0 0.0 0.0 0.0 2.6 3.5 Products revenue 0.0 0.0 0.0 0.0 0.0 2.6 3.5 Total services revenue 4.7 3.6 3.8 4.3 5.6 4.3 4.7 Other inc
Slide 41: Atea – Specialists in IT infrastructure
AICRA Specialists in IT infrastructure