Proact It Group Ab · OMXSTO:PACT
Proact It Group Ab — Q3 2022 Earnings Presentation
24 slides from Proact It Group Ab's earnings presentation, Oct 25, 2022
Slide 1: Summary Q3 2022
Summary Q3 2022 October 25, 2022 Jonas Hasselberg CEO and President jonas.hasselberg@proact.eu Linda Höljö CFO www.proact.eu linda.holjo@proact.eu
Slide 2: Agenda
Agenda • Proact introduction • Proact’s market • Key developments • Financial results • Summary Jonas Hasselberg Linda Höljö CEO and President CFO
Slide 3: Who is Proact
Who is Proact FI NO 1994 Almost 3 decades of helping customers drive SE business value and growth – through IT EE LV DK LT 4 000 Medium and large enterprise UK NL customers across Europe BE DE CZ 4 250 Million SEK turnover with stable finances. Listed on Nasdaq Stockholm since 1999 1 200 Employees w
Slide 4: Businesses across all industries are in state of transformation
Businesses across all industries are in "state of transformation”. Data is the key to this transformation. The three defining trends in the market - Focus on digital transformation and business innovation through IT - Increase speed, flexibility and availability through multicloud - Ensure cyber sec
Slide 5: Value to customers via our propositions
Value to customers via our propositions
Slide 6: Our multi-cloud model enables delivery to you anywhere
Private Public Managed Our multi-cloud model enables delivery to you anywhere On-premises infrastructure
Slide 7: Quarter 3 in brief
Quarter 3 in brief + 36% Revenue growth, 21% organic – Low-margin Systems one-time deals + TCV growth to 158 (75) MSEK – Market uncertainties continue + 26% ARR growth to 1 479 MSEK + EBITA growth of 31% to 78.3 MSEK + Acquisition of sepago GmbH in DE
Slide 8: Acquisition of sepago GmbH
Acquisition of sepago GmbH • Founded 20 years ago • 85 employees in Cologne, Hamburg and Munich About • 100 enterprise and public customers • Cloud consulting: Strategy, workplace, infrastructure, security • Microsoft gold partner, Citrix platinum advisor • Strategic public cloud and transformation
Slide 9: Acquisition of sepago GmbH Financials
Acquisition of sepago GmbH • Purchase price: 12 MEUR cash-free, debt-free • Earn-out: 4 MEUR over 2.5 years • Multiple: Financials • Yearly revenue: 5-6x EBITA 15 MEUR • EBITA margin: >10 %
Slide 10: Key developments in Q3
Key developments in Q3 • Named one of Sweden's 10 best companies for young talent • Proact has, in multiple categories, received top scores in the Giarte IT Xperience Monitor assessment • Proact’s Container-as-a-Service Platform earns Certified Kubernetes® status
Slide 11: Financial development
Financial development
Slide 12: Income Statement – Highlights Q3 2022
Income Statement – Highlights Q3 2022 TOTAL REVENUE SYSTEM SALES SERVICES SALES GROWTH MSEK GROWTH MSEK GROWTH MSEK 36% 1 099 42% 629 28% 469 Adj. EBITA PROFIT BEFORE TAX GROWTH MSEK Margin GROWTH MSEK Margin 31% 78.3 7.1% 13% 56.1 5.1%
Slide 13: Revenue development
Revenue development Revenues Key developments in the third quarter • Revenue growth 36% • 21% organically • Acquisitions contributing 10% and currency effects 4% • New cloud contracts of SEK 158 million (75) • Services growth of 28% (6% organically) • Cloud revenue increase of 34%, positively impact
Slide 14: Profitability development
Profitability development Adjusted EBITA Key developments in the third quarter • Adjusted EBITA of SEK 78.3 million (59.8) • Increase by 31% • Margin of 7.1% (7.4) • Gross margin decreased somewhat • Lower margins primarily systems • Last year’s systems margin on a relatively high level • SG&A costs
Slide 15: BU Nordics & Baltics
BU Nordics & Baltics Revenues Key developments in the third quarter • Revenue growth 29% (31% organically) • Systems 42% (organic 47%) • Services 7% (organic 3%), with largest increase in support services • Strong systems market in majority of countries, and some delivery of backlog • EBITA margin d
Slide 16: BU UK
BU UK Revenues Key developments in the third quarter • Revenue increased with 30% (25% organically) • Systems increased 75% (organically 68%) • Services decreased 2% (organically -5%) • Growth in cloud services, while support negatively impacted by earlier weaker systems sales • EBITA margin decreas
Slide 17: BU West
BU West Revenues Key developments in the third quarter • Revenues unchanged • Organic decrease 4% • Systems decreasing 29% (-32% organically) • Services increasing 13% (9% organically) • Low growth in Systems sales with Proact’s market transforming to increased demand for services • Strong demand fo
Slide 18: BU Central
BU Central Revenues Key developments in the third quarter • Revenue growth by 136% (organic 12%) • Systems 94% (organically 17%) • Services 207% (organically 7%) • ahd contributing with 78 MSEK in revenues and sepago with 27 MSEK • Strong organic systems growth with several large deals delivered dur
Slide 19: Cash flow in Q3
Cash flow in Q3 Liquid Funds June 30, 2022 528 • Positive cash-flow from current operations Cash-flow from current operations -78 before change in working capital Current operations 108 • Negative change in working capital is mainly Change in working capital -186 related to decreased accounts payabl
Slide 20: Cash flow January – September 2022
Cash flow January – September 2022 Liquid Funds December 31, 2021 464 • Positive cash-flow from current operations Cash-flow from current operations 89 before change in working capital Current operations 309 • Negative change in working capital is mainly Change in working capital -219 related to inc
Slide 21: Balance sheet
Balance sheet 2022 2021 2021 • Equity ratio of 23% (MSEK) Sep 30 Dec 31 Sep 30 • Cash position of SEK 285 million Total Assets 3,682 3,395 2,768 whereof Goodwill 991 821 650 • Net debt, including leasing liabilities, of whereof Intangible fixed assets 253 225 126 SEK 483 million, increased since whe
Slide 22: Financial goals
SALES GROWTH FINANCIAL TARGET OUTCOME SEK 4 259 million in sales rolling 12 months GOALS >10% 19.5% Rolling 12 months EBITA MARGIN TARGET OUTCOME* Increase from 5.8% FY2021 8% 6.3% NET DEBT/EBITDA TARGET OUTCOME* <2 1.13 Remains better than target ROCE TARGET OUTCOME Increase from 13.4% FY2021 >25%
Slide 23: Summary
Summary • Strong revenue and profit growth organically and through acquisitions • Strategic public cloud acquisition of sepago in Germany • High demand for managed cloud services and strong growth in Annualized Recurring Revenue (ARR) • Market uncertainties with inflation and economic down-turn
Slide 24: Thank you
Thank you www.proact.eu