Proact It Group Ab · OMXSTO:PACT
Proact It Group Ab — Q3 2019 Earnings Presentation
21 slides from Proact It Group Ab's earnings presentation, Oct 17, 2019
Slide 1: Summary Q3 2019
Summary Q3 2019 17 October, 2019 Jonas Hasselberg, CEO and President jonas.hasselberg@proact.eu Jonas Persson, CFO jonas.person@proact.eu
Slide 2: Agenda
AGENDA Proact & the market Special highlights Key figures Summary
Slide 3: About Proact
About Proact FI NO SE Founded in 1994 EE LV DK System and hybrid cloud specialist LT NL UK 3 600 MSEK turnover BE DE CZ SK Over 1000 employees at 37 offices HQ in Stockholm, Sweden US Four BU:s with service delivery hubs
Slide 4: Operating in a market where customers…
Operating in a market where customers… … experience higher business expectations to support growth … need to focus more on generating business value … need to focus more on innovation and speed-of-change … experience stronger business control of IT budgets … increasing spend outside the IT
Slide 5: Leading to new CIO priorities
Leading to new CIO priorities Generate business value and revenue Manage the speed of change Modernizing datacenter Integrating hybrid cloud deployment models Ensuring security and information in complex environments
Slide 6: How Proact leverage on market developments
How Proact leverage on market developments Grow addressable market through portfolio development and innovation Expand customer presence through business-driven IT Leverage being a trusted advisor in Hybrid Cloud and information-centric solutions Accelerate growth through acquisitions in cor
Slide 7: PeopleWare acquisition: doubling our presence in NL & BE
PeopleWare acquisition: doubling our presence in NL & BE Since 2003 / 220 employees / locations in NL & BE Strong within the mid-sized enterprise segment Core focus = outsourcing, cloud infrastructure and consultancy Award winning for its customer centricity (1st in Giarte) Strong Microsof
Slide 8: PeopleWare acquisition: doubling our presence in NL & BE
PeopleWare acquisition: doubling our presence in NL & BE Will be integrated with Proact = 340 employees in 4 offices Good cultural fit Good strategic fit with complementary capabilities and services Great cross & upselling opportunities Supports our M&A agenda to accelerate growth and broa
Slide 9: PeopleWare acquisition
PeopleWare acquisition Purchase price = EUR 17 million 11% 2% Yearly revenue = EUR 28 million High recurring revenue mix of ~50% 87% EBITA = ~7% Services HW & SW Other
Slide 10: Numbers for Q3
PROACT Numbers for Q3
Slide 11: Key Q3 Messages
Accelerated growth +280 MSEK Key Q3 Messages Cloud Revenue +15% Cloud Services total contract value 87 MSEK Revenue Decline . -3%
Slide 12: Income Statement Q3 2019
Income Statement Q3 2019 (MSEK) System Sales Jul-Sep 2019 415.0 Jul-Sep 2018 447.4 Services 285.3 277.1 Other 0.4 0.0 Revenue 700.7 724.6 TOTAL REVENUE SYSTEM SALES SERVICES SALES Products and services -527.2 -542.0 Gross profit 173.6 182.5 GROWTH MSEK GROWTH MSEK GROWTH MSEK Gross margin 24.8% 25.2
Slide 13: Income Statement January - September 2019
Income Statement January - September 2019 (MSEK) System Sales Jan-Sep 2019 1,567.1 Jan-Sep 2018 1,503.7 Services 848.7 843.7 Other 1.1 3.3 Revenue 2,416.9 2,350.7 TOTAL REVENUE SYSTEM SALES SERVICES SALES Products and services -1,860.2 -1,774.2 Gross profit 556.7 576.5 GROWTH MSEK GROWTH MSEK GROWTH
Slide 14: Income Statement Rolling 12 months
(MSEK) Oct-Sep 2019 Oct-Sep 2018 Income Statement Rolling 12 months System Sales Services 2,238.0 1,143.8 2,104.5 1,133.7 Other 2.1 4.6 Revenue 3,383.9 3,242.8 Products and services -2,611.5 -2,454.0 TOTAL REVENUE SYSTEM SALES SERVICES SALES Gross profit 772.4 788.9 Gross margin 22.8% 24.3% GROWTH M
Slide 15: Revenue & EBITA in Q3 per Business Unit
Revenue & EBITA in Q3 per Business Unit Positive development in Cloud business with 15% 2019 2018 growth to 123 MSEK July - September July - September Strong growth of 30% in Nordics with stable gross (MSEK) Revenue EBITA Net margin Revenue EBITA Net margin margins with good impact on EBITA Nord
Slide 16: Revenue & EBITA January-September per Business Unit
Revenue & EBITA January-September per Business Unit Revenue growth in Nordics YTD of 17%, improved 2019 2018 EBITA margin due strong system sales January - September January – September Margin improvements in UK delivering flat EBITA on (MSEK) Revenue EBITA Net margin Revenue EBITA Net margin so
Slide 17: Cash flow in Q3
Cash flow in Q3 Negative change in working capital -39 (-11) MSEK Liquid Funds June 30, 2019 219 but still +27 MSEK on 12 months rolling Cash-flow from current operations 44 Current operations 83 Fixed assets; Proact Finance -5 MSEK Change in working capital -39 Repayment of Leasing Liabilitie
Slide 18: Cash flow January-September 2019
Cash flow January-September 2019 Negative change in working capital -66 (-59) MSEK Liquid Funds December 31, 2018 270 but still +27 MSEK on 12 months rolling Cash-flow from current operations 121 Current operations 186 Fixed assets; Proact Finance -38 MSEK Change in working capital -66 Repayme
Slide 19: Balance sheet
Balance sheet (MSEK) 2019 Sep 30 2018 Dec 31 2018 Sep 30 Total Assets 2,251 2,213 1,915 whereof Goodwill 409 393 399 Solidity of 23% including a negative impact from IFRS 16 of 262 MSEK, will drop due to acquisition of PeopleWare whereof Intangible fixed assets 55 70 81 Cash position of 217 MSEK
Slide 20: Financial Goals
SALES GROWTH FINANCIAL TARGET OUTCOME 3 384 MSEK, +300 MSEK from PeopleWare GOALS >10% +4% Rolling 12 months EBITA MARGIN TARGET OUTCOME* Adjusted for one-time costs 8% 5.2% NET DEBT/EBITDA TARGET OUTCOME IFRS16 impact of 262 MSEK <2 0.63 ROCE TARGET OUTCOME Impacted by IFRS 16 and one-time costs >2
Slide 21: Summary
Summary Market opportunities remain positive Some improvements in Business Unit West Positive cloud development Strengthening presence in NL and BE via acquisition of PeopleWare