Slide 1: Proact IT Group Quarterly presentation Q3 2024
Proact IT Group Quarterly presentation Q3 2024 25 October 2024
Slide 2: Agenda
Agenda • Proact introduction • Proact’s market • Quarterly highlights • Financial results • Summary Jonas Hasselberg Noora Jayasekara CEO and President CFO
Slide 3: Proact is a leading IT expert securing business critical data via hybrid cloud
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 across 4 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 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
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Slide 7: 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, Sustainability and Increased demand for Information security Hyb
Slide 8: Growing market with strong growth driven by cloud adoption
We act on an increasingly growing market, with strong growth driving from cloud adoption anticipated in the years ahead Systems and services market size, SE, NL, UK, DE CAGR CAGR 2021-24 2024-27 +5% +3% Cloud +12% +12% Non-cloud -2% 0% 2021 2022 2023 2024F 2025F 2026F 2027F
Slide 9: We provide mission-critical services across all industry verticals
We provide mission-critical services to customers across all industry verticals Selected Proact customer’s mission-critical use cases Guiding customer’s on their journey to cloud Delivery Route Digital Patient Records SaaS Optimization AI Automated Rapid Application Cyber protection and Redaction De
Slide 10: 2024 Q3 Highlights
2024 Q3 Highlights Quarterly highlights • Strong organic growth, increased profitability and a stable cash Revenue Annualized recurring revenue flow in Q3 1,133 SEKm (+6.3%) 1,704 SEKm • Positive cash generation and strong balance sheet after new (-2.4%) share buy-back program initialized in Q3 Syst
Slide 11: New cloud services to address evolving customer needs
New cloud services to address evolving needs of our customers AI Enabled Platform-as-a-Service Sovereign Cloud Platform-as-a-Service Enable flexible access to high-performing AI compute platform Enable legal and jurisdictional compliance & protection of sensitive applications and data • AI enabled h
Slide 12: Cleanroom | Validate and test before recovery
Cleanroom | Validate and test before recovery CLEAN ROOM Cleanroom recovery uses a malware-free cloud // environment to ensure CLOUD clean recovery. This VAULT identifies and remediates BACKUP threats before restoring Offsite STORAGE Logical Air-gap data, so you can get back Separate duties up and r
Slide 13: Q3 revenue of 1,133 SEKm, +6.3% primarily driven by Central
Q3 revenue of 1.133 SEKm, +6.3% primarily driven by Central Revenue development, 2023 Q3 – 2024 Q3 Revenue by revenue stream (SEKm) +6.3% • Total revenue increased +6.3% whereof +8.8% 0 -10 1,133 organically -15 1 92 • System sales increased with +92 SEKm (organically 1,065 +20.1%), primarily due to
Slide 14: Growing share of recurring revenues, 38% of total revenue
Growing share of recurring revenues at a 10.2% CAGR from 2020-2024 Q3, currently making up 38% of total revenue Annualized recurring revenue development, 2019-2024 Q3 SEKm 1,800 10.2% 1,748 1,704 1,552 • ARR declined -2.4% in reported numbers, but 1,500 unchanged organically, compared to 2023 Q3 1,3
Slide 15: EBITA development +8.9% compared to last year
Decent EBITA development +8.9% compared to last year, with NOBA and West being the largest contributors EBITA development, 2023 Q3 – 2024 Q3 8.9% 4.2 -9.0 79.3 -0.8 5.0 72.8 7.1 7.0% 6.8% EBITA Q3 2023 Nordic & Baltics UK West Central Other EBITA Q3 2024 EBITA margin Note: Other incl. currency adjus
Slide 16: Net cash increased to 175 SEKm end of Q3 2024
Net cash increased to 175 SEKm end of Q3 2024 from 80 SEKm last December after dividend and share buy-back Net cash development Q4 2023 vs Q3 2024 (SEKm) Whereof 550 Whereof 652 SEKm cash, SEKm cash, 220 -46 226 SEKm interest bearing SEKm interest -31 debt and 251 SEKm leasing bearing debt and 164 -
Slide 17: Positive cash flow generation from operations increased
Positive cash flow generation from operations increased compared to previous year Cash generation, accumulated per year, 2020-2024 Q3 (SEKm) 532 468 454 317 304 292 234 203 191 168 159 149 104 90 48 38 30 -30 -56 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2022 2023 2024
Slide 18: Continued strong EBITA margin in Nordic & Baltic
Continued strong EBITA margin in Nordic & Baltic Business Unit deep-dive: Nordic & Baltics Nordic & Baltics Financial development Comments SEKm Q3 2024 Q3 2023 Change (%) • Total revenue up +0.4% and +2.3% Revenue 566 563 +0.4% organically 50% Share of total revenue1 EBITA 64 57 +12.4% EBITA margin
Slide 19: Strong system sales in UK compensate for decline in Customer Support
Strong system sales in UK compensate for decline in Customer Support Business Unit deep-dive: UK UK Financial development Comments SEKm Q3 2024 Q3 2023 Change (%) • Total revenue increased +8.9% and +10.4% Revenue 170 156 8.9% organically 15% Share of total revenue1 EBITA 3 3 -23.3% EBITA margin (%)
Slide 20: Strengthened EBITA-margin in West
Strengthened EBITA-margin in West with further room for improvement Business Unit deep-dive: West West Financial development Comments SEKm Q3 2024 Q3 2023 Change (%) • Total revenue increased +13.8% and Revenue 216 189 13.8% +17.1% organically 19% Share of total revenue1 EBITA 9 4 114.4% EBITA margi
Slide 21: Strong revenue growth in Central due to System business
Strong revenue growth in Central due to System business Business Unit deep-dive: Central Central Financial development Comments SEKm Q3 2024 Q3 2023 Change (%) • Total revenue increased +16.9% and +21.2 Revenue 210 180 16.9% organically 17% Share of total revenue1 EBITA 6 1 277.5% EBITA margin (%) 2
Slide 22: Good progress against long-term financial targets
Good progress against long-term financial targets + 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 10% 8% <2 x 20% after ta
Slide 23: Summary
Summary • Q3 revenue of 1.133 SEKm, up 6.5% • Good EBITA development +8.9% compared to last year landing at 79 SEKm • Solid financial position and strong cash flow • We are positive about the market development and our ability to meet increasing customer needs in hybrid cloud solutions, security and
Slide 24: Thank you
Thank you