Proact It Group Ab · OMXSTO:PACT
Proact It Group Ab — Q1 2024 Earnings Presentation
19 slides from Proact It Group Ab's earnings presentation, May 7, 2024
Slide 1: Proact IT Group Quarterly presentation Q1 2024
Proact IT Group Quarterly presentation Q1 2024 7 May 2024
Slide 2: Agenda
Agenda • Proact introduction • Proact’s market • Quarterly highlights • Financial results • Summary Jonas Hasselberg Åsa Regen Jansson CEO and President CFO
Slide 3: Proact is a leading IT expert helping customers secure business critical data
Proact is a leading IT expert helping customers secure business critical data via world-class hybrid cloud solutions Proact introduction Proact in brief Geographical footprint Revenue and EBITA development (SEKm) • Founded in 1994, Proact has secured business critical data & pushed the Revenue limit
Slide 4: Proact is present in Northern Europe distributed across Business Units
Proact is present in Northern Europe distributed across 4 Business Units; Hybrid cloud services through our 4 main delivery HUBs Proact geographical presence and business units NOBA UK • c. SEK 2,620m revenue • c. SEK 660m revenue • 320 employees • 250 employees • 100+ Sales employees • 70+ Sales em
Slide 5: We offer best-in-class services; broad offering across the cloud journey
We offer best-in-class services; Our broad offering enable us to support our customers wherever they are in their cloud journey Proact offering 9% 23% Revenue streams1 56% 12% Systems Support services Managed Cloud Services Consulting services Independent provider and value- Premium support for the
Slide 6: Proact is well-positioned in an attractive growing market
Proact is well-positioned in an attractive growing market, with trends such as Cybersecurity and AI driving the demand for data and IT solutions Market trends and development Strong drivers and favourable trends Digital transformation, AI Sustainability and Increased demand for Information security
Slide 7: We provide mission-critical services to customers across all industry verticals
We provide mission-critical services to customers across all industry verticals Selected Proact customer’s mission-critical use cases Delivery Route Digital Patient Records SaaS Optimization AI Automated Rapid Application Cyber protection and Redaction Development Disaster Recovery
Slide 8: 2024 Q1 Highlights
2024 Q1 Highlights Quarterly highlights • Strong profitability growth driven by growth in the service Revenue Annualized recurring revenue business and improved gross margins SEK 1,191m (-2.4%) SEK 1,766m • Further buy-back of own shares supported by a positive cash (+10.6%) generation and strong ba
Slide 9: Q1 revenue of SEK 1.191m, -2.4% from a strong comparative quarter
Q1 revenue of SEK 1.191m, -2.4% from a strong comparative quarter but with healthy underlying growth Revenue development, 2023 Q1 – 2024 Q1 Revenue by revenue stream (SEKm) -2.4% • Total revenue decreased -2.4% and -2.8% 1,220.3 organically 1,191.3 -11.3 1.0 -61.1 26,4 • System sales SEK 638m (-8.7%
Slide 10: Growing share of recurring revenues at a 11% CAGR
Growing share of recurring revenues at a 11% CAGR from 2020-2024 Q1, currently making up more than 1/3 of total revenue Annualized recurring revenue development, 2019-2023 SEKm 1 800 +11% 1 748 1 766 1 552 • Sizeable Annualized Recurring Revenue (ARR), 1 500 making up more than 1/3 of total revenue
Slide 11: Exceptional EBITA development +66% compared to last year
Exceptional EBITA development +66% compared to last year, with Nordic & Baltics being the largest contributor EBITA development, 2023 Q1 – 2024 Q1 66.4% 94,5 -4.2 3.7 10,9 3.8 7.9% 23,5 56,8 4.7% EBITA Q1 2023 Nordic & Baltics UK West Central Other EBITA Q1 2024 EBITA margin Note: Other incl. curren
Slide 12: Net cash position following a strong development
Net cash position following a strong development, from SEK ~80m last quarter to SEK 113m 2024 Q1 Net debt development, Q1 2024 vs Q4 2023 (SEKm) Whereof SEK Whereof SEK ~600m cash, ~550m cash, SEK -17.5 SEK ~230m interest ~220m interest 55,5 -15.1 bearing debt and SEK bearing debt and -10.6 ~260m le
Slide 13: Positive cash flow generation from operations
Positive cash flow generation from operations, enabling investments as well as dividend Cash generation, accumulated per year, 2020-2024 Q1 (SEKm) 532 468 454 304 292 203 191 168 159 149 104 90 48 38 30 -30 -56 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2020 2021 2022 2023 2024
Slide 14: Strong EBITA margin uplift in Nordic & Baltics
Strong EBITA margin uplift of +4.3 p.p. in Nordic & Baltics compared to last year Business Unit deep-dive: Nordic & Baltics Nordic & Baltics Financial development Comments SEKm Q1 2024 Q1 2023 Change (%) • Total revenue SEK 598m, a decrease of - Revenue 598 630 -5.2% 5.2% and -4.5% organically YoY d
Slide 15: Strengthened financials in UK
Strengthened financials in UK, with revenue growth of c. 17% and significant EBITA improvement compared to a weak Q1 in 2023 Business Unit deep-dive: UK UK Financial development Comments SEKm Q1 2024 Q1 2023 Change (%) • Total revenue SEK 184m growing 17% Revenue 184 157 17.1% and 12.5% organically
Slide 16: Significant EBITA growth in West
Significant EBITA growth in West, growing from 2.4% margin in Q1 2023 to 7.0% in 2024 Business Unit deep-dive: West West Financial development Comments SEKm Q1 2024 Q1 2023 Change (%) • Total revenue SEK 229m growing 5% and Revenue 229 218 5.1% 4% organically 19% Share of total revenue1 EBITA 16 5 2
Slide 17: Weak performance in Central
Weak performance in Central, reflecting a slow German market during the first quarter 2024, along with changes is management Business Unit deep-dive: Central Central Financial development Comments SEKm Q1 2024 Q1 2023 Change (%) • Total revenue SEK 202m, a decrease of Revenue 202 237 -14.8% -15% 17%
Slide 18: Good performance against long-term financial targets
Good performance against long-term financial targets; Especially strong leverage position Financial development and long-term financial targets Sales EBITA Leverage ROCE Dividends Sales growth per annum EBITA margin Net debt / EBITA Return on capital employed Dividends as share of profit after tax 1
Slide 19: Summary
Summary • Record first quarter with strong profitability growth of 66% • Continuous build up of recurring revenues with a strong intake in new cloud service contracts • Market improvement partly driven by Artificial Intelligence and Cybersecurity