Slide 1: Summary Q2 2023
Summary Q2 2023 July 14, 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 LT 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 w
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: Quarter 2 in brief
Quarter 2 in brief + 4% revenue growth – TCV at 116 (141) MSEK + 19% ARR growth to 1,679 MSEK – EBITA decline of -0.9% to 81.4 MSEK + Stable gross margins at 22.6% (22.3%) – 2% organic revenue decline + Cost efficiency program implemented
Slide 12: Cost efficiency program
Cost efficiency program • Program implemented in Q1 and Q2 • Majority of activities executed • Total restructuring costs of 19.6 MSEK, recognised in Q2 • In-year savings of 45 – 50 MSEK, mainly in Q3 and Q4 • Going into 2024 with a lower cost base of ca 60 MSEK • Cost reductions offsetting inflation
Slide 13: Financial development
Financial development
Slide 14: Income Statement – Highlights Q2 2023
Income Statement – Highlights Q2 2023 TOTAL REVENUE SYSTEM SALES SERVICES SALES GROWTH MSEK GROWTH MSEK GROWTH MSEK 4% 1,202 -6% 663 20% 537 Adj. EBITA PROFIT BEFORE TAX GROWTH MSEK Margin GROWTH MSEK Margin -0.9% 81.4 6.8% -47% 34.4 2.9%
Slide 15: Revenue development
Revenue development Revenues Key developments in the second quarter • Revenue growth 4% (-2% organically) • Strong comparison quarter • A few markets with slowing demand • Acquisitions contributing 2% and currency effects 4% • New cloud contracts of SEK 116 million (141) • Services growth of 20% (9%
Slide 16: Profitability development
Profitability development Adjusted EBITA Key developments in the second quarter • Adjusted EBITA of SEK 81,4 million (82,1) • Decrease by 1% • Margin of 6.8% (7.1) • Gross margin slightly increased • Unchanged margins for systems • Slightly increased margins for services, with efficiencies and price
Slide 17: BU Nordics & Baltics
BU Nordics & Baltics Revenues Key developments in the second quarter • Revenue decreased 0.5% (2% organically) • Systems decreased 7% (organically 8%), primarily due to strong comparison quarter • Services increased 17% (organically 15%), with good growth in all areas • EBITA margin increasing to 8.
Slide 18: BU UK
BU UK Revenues Key developments in the second quarter • Revenue increased with 32% (24% organically) • Systems increased 57% (organically 48%) primarily due to weak comparison quarter • Services increased 15% (organically 9%) • Growth in cloud services due to previously won contracts • Consulting se
Slide 19: BU West
BU West Revenues SEK m SEK m Key developments in the second quarter • Revenue growth 8% (2% organic decrease) 250 1 000 • Systems decreased 3% (11% organically) due to a slightly 200 750 slower market 150 • Services increasing 12% (2% organically) 500 • Support services showing good growth due to ne
Slide 20: BU Central
BU Central Revenues SEK m SEK m Key developments in the second quarter 240 1 000 • Revenue decrease by 1% (organically -22%) • Systems -37% (organically -47%) 180 750 • Services growth of 49% (organically +13%) • Acquisition of sepago (Jul 2022) contributing to revenues 120 500 • Slower systems mark
Slide 21: Cash flow in Q2
Cash flow in Q2 • Positive cash-flow from current operations before Liquid Funds March 31, 2023 501 change in working capital Cash-flow from current operations 129 • Positive change in working capital Current operations 86 Change in working capital 43 • Increased accounts payables and operating paya
Slide 22: Cash flow January – June 2023
Cash flow January – June 2023 • Positive cash-flow from current operations before Liquid Funds Dec 31, 2022 506 change in working capital Cash-flow from current operations 159 • Small negative change in working capital Current operations 176 Change in working capital -17 • Investment in fixed assets
Slide 23: Balance sheet
Balance sheet 2023 2022 2022 • Equity ratio of 23% (MSEK) Jun 30 Dec 31 Jun 30 • Cash position of SEK 443 million Total Assets 4,159 4,242 3,626 whereof Goodwill 1,037 984 844 • Net debt, including leasing liabilities of SEK whereof Intangible fixed assets 215 231 211 199 million, in line with June
Slide 24: Financial goals
SALES GROWTH FINANCIAL TARGET OUTCOME SEK 4 961 million in sales rolling 12 months GOALS >10% 24,9% Rolling 12 months EBITA MARGIN TARGET OUTCOME* Minor decrease from 6.6% FY2022 8% 6.4% NET DEBT/EBITDA TARGET OUTCOME* <2 0.41 Significantly better than target ROCE TARGET OUTCOME Decreased from FY202
Slide 25: Summary
Summary • Cost efficiency program implemented, positioning Proact well for coming quarters • Strong services growth • Continued growth in Annualised Recurring Revenue (ARR) to 1,679 MSEK • 1,413 MSEK in Q2 2022 • 1,552 MSEK in Q4 2022
Slide 26: Thank you
Thank you www.proact.eu