Dustin Group Ab · OMXSTO:DUST
Dustin Group Ab — Q3 2023 Earnings Presentation
31 slides from Dustin Group Ab's earnings presentation, Jun 27, 2023
Slide 1: Q3 2022/23
Q3 2022/23 June, 2023 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 Offline Dustin (B2B) million ~14% ~40% Hardware: Clients 25,000 Servers 20,000 15,000 Dustin Home (B2C) 10,000 Software: OS SaaS 5,000 0,000 Hardware Online ~86% Services: Financing
Slide 3: Strong cash-flow in a cautious market
Strong cash-flow in a cautious market Financial Highlights Net sales and adjusted EBITA margin Net sales was 5,582 (5,894) MSEK • Reported net sales growth was -5.3% • Organic growth was -9.4%, of which SMB -17.4% and LCP -5.5% 7 000 16% 6 500 Gross profit was 857 (842) MSEK 5,894 14% 6 000 5,582 •
Slide 4: Financial development – SMB
Financial development – SMB Gross margin improvement but low volumes in a cautious market Net sales and segment margin Net sales decline in SMB of 16.2% y/y • Organic growth of -17.4% 2 500 25% • Decline due to general economic uncertainty and a strong comparable quarter 1,974 Segment result was 65
Slide 5: Financial development – LCP
Financial development – LCP Margin improvement but sales burdened by expiry of Danish contract Net sales and segment margin Net sales growth in LCP of 0.2% y/y • Adjusted for SKI contract, reported growth was approximately 8% • Organic growth of -5.5% 15% 5 000 Segment result increased to 141 (119)
Slide 6: Improved net working capital towards target range
Improved net working capital towards target range Improved net working capital due to reduced customer specific inventory Net Working Capital • Net working capital was -22 MSEK (4), (improved from 228 MSEK in Q2 and 336 MSEK in Q1), due to lower inventory 0.9% 0.2% 0.6% 200 -0.4% -0.8% -1.7% -1.0% -
Slide 7: Within the targeted range of inventory in the quarter
Within the targeted range of inventory in the quarter Inventory split Reduced customer-specific inventory • Inventory decreased further by approximately 190 MSEK in the 1,610* third quarter, compared to the second quarter 1,470* 1,340* • Core inventory decreased slightly versus the second quarter an
Slide 8: Cash flow, Investments and Leverage
Cash flow, Investments and Leverage Strong cash flow generation due to changes in net working capital Changes in Cash Flow Y/Y • Cash flow for the quarter was 323 (-380) MSEK • Cash flow from operating activities, before changes in working capital, was 142 (184) MSEK, due to lower EBIT and higher pa
Slide 9: Priority of results in order of importance
Focus on short-term actions – but strong position enables investments for the future Priority of results in order of importance 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
Slide 10: 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 11: Summary of the third quarter 2022/23
Summary of the third quarter 2022/23 Strong cash-flow in a cautious market Net sales declined 5.3% to 5,582 (5,894) MSEK • Group organic net sales growth of -9.4% in constant currency • Organic growth in SMB of -17.4% and in LCP of -5.5% Gross profit of 857 (842) MSEK and gross margin at 15.3% (14.3
Slide 12: Corporate presentation
Corporate presentation C Dustin
Slide 13: Dustin at a glance
Dustin at a glance 280,000 hardware and software products… …primarily sold online… Net sales SEK Software and Services Offline Dustin (B2B) million ~14% ~40% Hardware: Clients 25,000 Servers 20,000 15,000 Dustin Home (B2C) 10,000 Software: OS SaaS 5,000 0,000 Hardware Online ~86% Services: Financing
Slide 14: 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 15: 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 ~120,000 Dustin products B2C (Business to Consumer) ~350,000 A large number of suppliers… needs an aggregato
Slide 16: 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 17: 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 18: A unique space
A unique space High ERP implementation Atea Accenture Strategic IT consultancy Crayon Advania Integrated solutions 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 Komplet
Slide 19: 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 20: 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 21: Integration and synergy extraction effects
Integration and synergy extraction effects as of the second half of 2022/23 and 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
Slide 22: 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 23: 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 24: One IT Platform enables cost synergies
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 ConnectWise & Service Business Intelligence & Data ERP & CRM Portals & Open Web Management Innovation Our future platform
Slide 25: Reducing NWC to between -100 and -200
Reducing NWC to between -100 and -200 Actions to reduce NWC will lead to… … reduced inventory levels and… 1,610* 1,340* What ~1,100* 1 019 Leveraging on our new organizational structure and 887 ~600 combined size 157 ~150 146 408 Moving from old way of procuring towards “just-in-time” 332 ~350 p
Slide 26: Leverage projection using financial target parameters
Leverage projection using financial target parameters Assumptions used in financial projection 4.8 4.5 1 EBITDA according to financial targets FY25/26 4.2 4.3 4.3 2.9 3.7 2 CAPEX modelled on ~200 MSEK on an annual basis Inventory estimated to come down to 1.1 BnSEK at 1.7 3 the end of FY22/23, and a
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