Dustin Group Ab · OMXSTO:DUST
Dustin Group Ab — Q1 2023 Earnings Presentation
29 slides from Dustin Group Ab's earnings presentation, Jan 11, 2023
Slide 1: Q1 2022/23
Q1 2022/23 January, 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 growth within public sector, weak growth in SMB and cost inflation
Strong growth within public sector, weak growth in SMB and cost inflation puts pressure on results Financial Highlights Net sales and adjusted EBITA margin Net sales was 6,636 (5,826) MSEK • Reported net sales grew by 13.9% • Organic growth was 8.5%, of which SMB -8.1%, LCP 17.0% and B2C -3.3% 7 000
Slide 4: Financial development – SMB
Financial development – SMB Slower growth versus strong comparable quarter Net sales and segment margin Net sales decline in SMB of 4.4% y/y • Organic growth of -8.1% 2 000 1,853 25% • Mainly due to strong comparable quarter and general economic uncertainty 1,771 1 800 Segment result was 180 (230) M
Slide 5: Financial development – LCP
Financial development – LCP Strong growth driven by larger roll-outs and increased supply of standard Net sales and segment margin hardware Net sales growth in LCP of 23.3% y/y • Organic growth of 17.0% 5 000 4,727 30% 4 500 Segment result decreased to 279 (293) MSEK 3,834 25% 4 000 Segment margin •
Slide 6: Financial development – B2C
Financial development – B2C Slightly negative sales development Net sales and segment margin Net sales growth declined 0.7% y/y • Organic growth was negative 3.3% 25% Segment result was 9.5 (15.5) MSEK • Segment margin at 6.9% (11.1%) 150 140 139 20% Segment margin Slow growth and lower margin MSEK
Slide 7: Net working capital and Leverage
Net working capital and Leverage High net working capital due to customer specific inventory • Net working capital was 336 MSEK (-334) Net Working Capital • Inventory increased by 472 MSEK (increase versus Q4 of approx. 270 MSEK), where the larger part of the increase relates to pre-ordered customer
Slide 8: Higher net working capital driven by customer-specific inventory
Higher net working capital driven by customer-specific inventory Customer-specific inventory driving net working capital in the quarter • Inventory increased by approximately 270 MSEK in the first 1,610 (1,138)* quarter, partly explained by currency fluctuations 1,340* • Core inventory increased, fr
Slide 9: Cash flow and Investments
Cash flow and Investments Cash flow burdened by higher net working capital Change in Cash Flow Y/Y • Cash flow for the quarter was 218 (294) MSEK • Cash flow from operating activities, before changes in working capital, was 150 (283) MSEK 400 • Cash flow from changes in working capital was -235 (86)
Slide 10: Gross margin negatively affected by mix effects
Gross margin negatively affected by mix effects 18 Gross margin Q1 22/23 versus Q1 21/22 16 15.4% • Larger low margin roll-outs to a few LCP customers affected gross margin negatively by 0.5 percentage points 14 -0.5% 13.5% • Higher share of new LCP contracts and large volumes of -0.6% standard hard
Slide 11: Integration and synergy extraction according to plan
Integration and synergy extraction according to plan SMB NL (EBITA 40-60 MSEK) ~220 Synergies Revenue LCP Tender (EBITA 15-35 MSEK) MSEK/YEAR Sales & cost synergies Private Label NL (EBITA 30-50 MSEK) Procurement (EBITA 10-30 MSEK) Synergies Costs Back office (EBITA 10-20 MSEK) Processes, Quality Im
Slide 12: Strategic actions towards our 2030 commitments
Strategic actions towards our 2030 commitments Third quarter development towards our sustainably commitments • Circular share in relation to net 0 CO2 Circular share in Q1 22/23 sales for the first quarter Climate impact Zero carbon emissions 2022/23 increased to 33.7% across the value chain (25.0%
Slide 13: Summary of the first quarter 2022/23
Summary of the first quarter 2022/23 Strong growth within public sector, weak growth in SMB and cost inflation puts pressure on results Net sales grew 13.9% to 6,636 (5,826) MSEK • Group organic net sales growth of 8.5% in constant currency • Organic growth in SMB of -8.1%, LCP of 17.0% and B2C of -
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 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 16: Dustin – the aggregator and destination
Dustin – the aggregator and destination Dustin services LCP (Large Corporate and Public) Hardware, software & services ~10,000 active customers Distributors SMB (Small and Medium Sized Businesses) List 5 Rows ~120,000 active customers Dustin products B2C (Business to Consumer) ~350,000 active custom
Slide 17: 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 ~20% of net sales Cloud solutions MPS1) Higher gross margin Advanced p
Slide 18: 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 19: 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 20: 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 21: Positioned to outgrow the market supported by strong market trends
Positioned to outgrow the market supported by strong market trends ~10% total growth over a cycle of which ~8% organic and 2-3% bolt-on acquisitions Average expected annual growth over a cycle Dustin’s position B2B market trends Premium growth in services • Online leader • Increasing share of 2-3% •
Slide 22: Strong history of profitable growth – now writing the fourth chapter
Strong history of profitable growth – now writing the fourth chapter 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
Slide 23: 40 billion sales company in five years
40 billion sales company in five years E ~4 BnSEK ~40 BnSEK D Growth through C 2.5 – 3 BnSEK geographical B ~36 BnSEK A 1.2 – 1.4 BnSEK Growth through expansion into Net sales 7.5 – 8.5 BnSEK 1.2 – 1.5 BnSEK bolt-on value new markets Synergies adding Continued through Benelux 2025/26 Growth within a
Slide 24: Our five-year plan for margin expansion
Our five-year plan for margin expansion D E 0.2 – 0.3% C -0.1 - 0.2% ~5-6% 0.1 – 0.2% Introduction of EBITA margin takeback Effect from new B Synergies program market entry 2025/26 0.1 – 0.2% through Benelux acquisitions A Ability to serve expansion 0.4 – 0.5% large customers Efficiency and and priv
Slide 25: Synergy extraction according to plan and additional cost savings
Synergy extraction according to plan and additional cost savings of 50-70 MSEK identified SMB NL (EBITA 40-60 MSEK) ~220 Synergies Revenue LCP Tender (EBITA 15-35 MSEK) MSEK/YEAR Sales & cost synergies Private Label NL (EBITA 30-50 MSEK) Procurement (EBITA 10-30 MSEK) Synergies Costs Back office (EB
Slide 26: Our financial targets – promise to our shareholders
Our financial targets – promise to our shareholders Dustin’s target is an average annual organic growth rate of 8 per cent over a business cycle. In addition Growth to this, Dustin intends to grow through acquisitions. Dustin’s target is to increase the adjusted EBITA margin over time, and to achiev
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: 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 29: Thank you
Thank you © Dustin