Dustin Group Ab · OMXSTO:DUST
Dustin Group Ab — Q1 2024 Earnings Presentation
31 slides from Dustin Group Ab's earnings presentation, Jan 10, 2024
Slide 1: Q1 2023/24
Q1 2023/24 January, 2024 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: Improved margins and strengthened financial position in a continued weak market
Improved margins and strengthened financial position in a continued weak market Financial Highlights Net sales and adjusted EBITA margin Net sales was 5,793 (6,636) MSEK • Organic growth was -16.2%, of which SMB -9.3% and LCP -18.8% • Reported net sales growth was -12.7% 7 000 6,636 16% • Sales grow
Slide 4: SMB - Continued cautious development in price-sensitive market
SMB - Continued cautious development in price- sensitive market Net sales decline in SMB of 10.4% y/y Net sales and segment margin • Organic growth of -9.3% • Continued cautious market development due to general economic uncertainty 2 500 20% Segment result was 61 (104) MSEK • Segment margin decreas
Slide 5: LCP - Stable underlying demand and strong margin development
LCP - Stable underlying demand and strong margin development Net sales growth in LCP of -13.6% y/y Net sales and segment margin • Sales growth negatively affected by approximately 13% related to a major contract now recognised on a net basis and the expired Danish contract • Organic growth was -18.8
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 Q1 Average FTE’s per Quarter -278 -1% (-11%) 2.479 2.495 632 2.500 2.441 2.405 2.422 2.373 2.391 -5% 2.400 22 2.300 2.252 2.217 2.200 2.100 2.000 SG&A 638 609 1.900 FX 1.800 1.700 1.600 1.500 Q1 FY Q2 FY Q3
Slide 7: Improved net working capital
Improved net working capital Improved net working capital due to reduced inventory Net Working Capital • Net working capital was -261 MSEK (336), mainly due to lower inventory • Inventory decreased by 671 MSEK to 939 MSEK (1,610), where the larger part 200 -0.8% -0.2% -1.3% -0.8% 0.0% -1.9% of the d
Slide 8: Inventory on a normalised level
Inventory on a normalised level Inventory split Reduced customer-specific inventory • Inventory decreased further in the first quarter, compared to the 1,610* fourth quarter 1,470* 1,340* • Total inventory on a balanced and normalised level 1,259* • Core inventory increased versus the fourth quarter
Slide 9: Cash flow and Capex
Cash flow and Capex Strong cash flow from operating activities Changes in Cash Flow Y/Y • Cash flow from operating activities, before changes in working capital, was 108 (150) MSEK, mainly due to higher paid interest and tax • Cash flow from changes in working capital was 142 (-235) MSEK, affected b
Slide 10: Reduced working capital and rights issue has secured leverage within target range
Reduced working capital and rights issue has secured leverage within target range Right conditions for intensified focus on our strategic plan Change in leverage from Q4 22/23 to Q1 23/24 and post rights issue • Reduced debt of 350 MSEK during Q1 through lower working capital and currency effects 5.
Slide 11: 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 12: Strong development in take-back in the quarter
Strong development in take-back in the quarter Take-back, total Today Units In-house takeback operations in the Nordics and in Benelux Increased demand and greater efficiency 250,000 in our take-back processes +99% Advantage in tenders 200,000 Current run rate of ~1 million units annually 15
Slide 13: Summary of the first quarter 2023/24
Summary of the first quarter 2023/24 Improved margins and strengthened financial position Net sales declined 12.7% • Continued cautious market • Major contract now recognised on a net basis and expired Danish contract Gross margin higher at 15.3% (13.5%) • Larger high margin deliveries within LCP an
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 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 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 ~100,000 Dustin products B2C (Business to Consumer) ~250,000 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 Bechtle Integrated solutions Advania 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
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 and is key for building the European IT powerhouse
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: 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 28: 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 29: 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 30: 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 31: Thank you
Thank you © Dustin