Proact It Group Ab · OMXSTO:PACT
Proact It Group Ab — Q4 2021 Earnings Presentation
29 slides from Proact It Group Ab's earnings presentation, Feb 10, 2022
Slide 1: Summary Q4 2021
Summary Q4 2021 February 10, 2022 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 LT 4,000 Medium and large enterprise UK NL customers across Europe BE DE CZ 350 Million-euro turnover with stable finances. Listed on Nasdaq Stockholm since 1999 1,100 Employees wi
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 three defining trends in the market - Focus on digital transformation and business innovation through IT - Increase speed, flexibility and availability through multicloud - Ensure cyber sec
Slide 5: Specialist in IT Infrastructure for managing Data and Information
Specialist in IT Infrastructure for managing Data and Information CONSULTING MANAGED SERVICES HARDWARE & SOFTWARE TECHNICAL SUPPORT
Slide 6: Value to customers via our propositions
Value to customers via our propositions
Slide 7: Our deployment models enable delivery to you
Private Public Managed Our deployment models enable delivery to you anywhere On-premises infrastructure
Slide 8: Quarter in brief
Quarter in brief + 17% up in Services revenue – Delivery delays from chip shortage + Record TCV with growth of 23% – 16% down in Systems revenue + Acquisition of ahd – EBITA % decreased to 6.0% (6.8%)
Slide 9: Semiconductor Shortages
Semiconductor Shortages • Global shortage of semiconductors since 2020 as result of Pandemic, trade conflicts, Suez incident & severe weather • Large number of industries impacted leading to price increases, long lead-times and shortage of products • Major manufacturers, including Intel and TSMC, ex
Slide 10: Acquisition of ahd Gmbh & Co. KG
Acquisition of ahd Gmbh & Co. KG • Founded 30+ years ago • 120 employees in western area of Germany (office down- town Dortmund and HQ in Ense 40km east of Dortmund) About • Managed cloud service company with >50% recurring MCS services • Datacentres in Frankfurt • 300 customers • Strong capabilitie
Slide 11: Acquisition of ahd Gmbh & Co. KG: Financials
Acquisition of ahd Gmbh & Co. KG • Purchase price: €26,2 M cash-free, debt-free • Multiple: 9x EBITA Financials • Yearly revenue: €30M • EBITA margin: 10%
Slide 12: Key developments in Q4
Key developments in Q4 • Cetus rebranded & Conoa integration on track with good progress on cross- and up-sell as well as co-development of offerings • Proact delivers infrastructure for AI to Region Västra Götaland • Winner of Dell Technologies awards for Customer Experience and Data Center Sales i
Slide 13: Region Västra Götaland (VGR)
AI and machine learning part of the ordinary IT delivery Region Västra Götaland (VGR) VGR has defined AI and machine learning as a strategic focus within the region. Proact’s specialists and high-performance AI infrastructure solutions enables VGR to get started and achieve faster results with AI an
Slide 14: Cyber Security: LOG4J Vulnerability
Cyber Security: LOG4J Vulnerability • A widely used Apache utility was found to have a critical Zero Day vulnerability • The security hole allowed a remote attacker to run any code, such as ransomware • Affecting hundreds of products and millions of systems across the World* • Among the single bigge
Slide 15: Financial development
Financial development
Slide 16: Income Statement – Highlights Q4 2021
Income Statement – Highlights Q4 2021 TOTAL REVENUE SYSTEM SALES SERVICES SALES GROWTH MSEK GROWTH MSEK GROWTH MSEK -4% 942 -16% 516 17% 425 Adj. EBITA Adj. PROFIT BEFORE TAX GROWTH MSEK Margin GROWTH MSEK Margin -14% 56.9 6.0% -26% 37.4 4.0%
Slide 17: Revenue development
Revenue development Key developments in the fourth quarter • Revenue growth -4% • -14% organically • Acquisitions contributing +9% and currency effects 0% • New cloud contracts of SEK 177 (142) million • Services growth of 17% (+4% organically) • Cloud revenue increase of 16%, positively impacted by
Slide 18: Profitability development
Profitability development Key developments in the fourth quarter • Adjusted EBITA of SEK 56.9 (66.4) million • Decrease by 14% • Margin of 6.0 (6.8)% • Gross margin unchanged • Favourable mix and good development in services • Slightly lower gross margin in systems • SG&A costs decreased by 9% for c
Slide 19: BU Nordics & Baltics
BU Nordics & Baltics Key developments in the fourth quarter • Revenue growth -2% (-14% organically) • Systems -9% (organic -21%) • Services +18% (organic +7%), with increase in all services but mainly consulting services +35% • Conoa acquisition contributing by SEK 62 million, within systems and con
Slide 20: BU UK
BU UK Key developments in the fourth quarter • Revenue decline 19% (-16% organically) • Systems -42% • Services 8% • Decline in systems revenues organically of 33%, while services growing by 4% organically, with consulting revenues particularly strong • Impact by semiconductor shortages as well as l
Slide 21: BU West
BU West Key developments in the fourth quarter • Revenue declined by 9% • Organic growth -8% • Systems -18% • Services -6% • Impact from semiconductor shortages, and low volume of new cloud service contracts • EBITA margin increasing to 12.3 (1.4)% • EBITA of SEK 7.1 (0.8) million • Action program i
Slide 22: BU Central
BU Central Key developments in the fourth quarter • Revenue growth by 23% (organic -16%) • Systems -8% • Services 76% • ahd consolidated for 2 months, contributing by 39 MSEK in revenues • Delays due to semiconductor shortages impacting revenues negatively • EBITA margin decreasing to 9.1 (10.9)% •
Slide 23: Cash flow in Q4
Cash flow in Q4 Liquid Funds September 30, 2021 321 • Positive cash-flow from current operations Cash-flow from current operations 255 before change in working capital Current operations 112 • Positive change in working capital is mainly Change in working capital 143 related to an increase in accoun
Slide 24: Cash flow Jan-Dec 2021
Cash flow Jan-Dec 2021 Liquid Funds December 31, 2020 468 • Positive cash flow from current operations Cash-flow from current operations 304 after change in working capital Current operations 354 • Small negative change in working capital Change in working capital -50 where payables decreasing more
Slide 25: Balance sheet
Balance sheet 2021 2020 • Equity ratio of 21% (MSEK) Dec 31 Dec 31 • Cash position of 464 MSEK Total Assets 3,395 2,924 whereof Goodwill 821 552 • Net debt, including leasing liabilities, of 261 whereof Intangible fixed assets 225 112 MSEK, increased since Dec 2020 by 283 MSEK. whereof Accounts rece
Slide 26: Full year overview
Full year overview • Full year revenue decline of 3% (-8% organically) • Systems revenues declining by 9% • Semiconductor shortages in Q4 have impact • Services revenues increasing by 6% • Recurring revenues growing by 3% • Cloud services growing by 1% • Consulting revenues growing by 16% • EBITA de
Slide 27: Financial goals
SALES GROWTH FINANCIAL TARGET OUTCOME SEK 3,525 million in sales rolling 12 months GOALS >10% -3% Rolling 12 months EBITA MARGIN TARGET OUTCOME* Large impact of lower revenues 8% 5.8% NET DEBT/EBITDA TARGET OUTCOME Remains significantly better than target <2 0.75 ROCE TARGET OUTCOME Impacted by IFRS
Slide 28: Summary
Summary • Significant negative impact on Systems deliveries from semiconductor shortage • Record closing of cloud contracts with TCV of 177 MSEK • Good underlying demand and backlog into 2022 • Acquisition of ahd in German market
Slide 29: Thank you
Thank you www.proact.eu