Dustin Group Ab · OMXSTO:DUST
Dustin Group Ab — Q2 2023 Earnings Presentation
32 slides from Dustin Group Ab's earnings presentation, Mar 29, 2023
Slide 1: Q2 2022/23
Q2 2022/23 March, 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: Improved inventory levels and strengthened margin from the first quarter
Improved inventory levels and strengthened margin from the first quarter Financial Highlights Net sales and adjusted EBITA margin Net sales was 6,272 (6,137) MSEK • Reported net sales grew by 2.2% • Organic growth was -2.4%, of which SMB -10.0% and LCP 1.1% 7 000 16% 6 500 6,137 6,272 Gross profit w
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 8.7% y/y • Organic growth of -10.0% 2 500 25% • Mainly due to strong comparable quarter and general economic uncertainty 1,996 Segment result was 80 (135) MSEK 2 000 1,
Slide 5: Financial development – LCP
Financial development – LCP Continued growth but sales burdened by expiry of Danish contract Net sales and segment margin Net sales growth in LCP of 7.4% y/y • Organic growth of 1.1% 20% Segment result increased to 173 (172) MSEK 5 000 4,450 • Segment margin was 3.9% (4.2%) 4,142 Segment margin 4 00
Slide 6: Net working capital and Leverage
Net working capital and Leverage Improved net working capital due to reduced customer specific inventory • Net working capital was 229 MSEK (-433), (improved from 336 in Q1) Net Working Capital • Inventory decreased by 39 MSEK to 1,220 MSEK (decrease versus Q1 of approx. 390 MSEK), where the larger
Slide 7: Sequentially lower net working capital driven by reduced customer-specific inventory
Sequentially lower net working capital driven by reduced customer-specific inventory Lower customer-specific inventory in the quarter • Inventory decreased by approximately 390 MSEK in the second 1,610 (1,138)* quarter, compared to the first quarter 1,340* • Core inventory decreased slightly versus
Slide 8: Cash flow and Investments
Cash flow and Investments Cash flow slightly lower due to lower EBIT Changes in Cash Flow Y/Y • Cash flow for the quarter was -19 (15) MSEK • Cash flow from operating activities, before changes in working capital, was 122 (278) MSEK, due to lower EBIT and higher paid taxes and interest 200 • Cash fl
Slide 9: 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 10: New segment reporting supporting cost focus
New segment reporting supporting cost focus Merge of SMB & B2C and redefined cost- Indicative effects on P&L based on FY 21/22 Group wide LCP organisation to increase scalability and knowledge sharing • LCP Nordic and LCP Benelux is merged FY21/22 SMB B2C SMB + B2C into one organization under the Me
Slide 11: Our path to decrease our CO2 impact
Our path to decrease our CO2 impact Today Sustainability is becoming an integral part of buying IT Launch of in-house takeback Advantage in tenders 25% reduction in CO2e/ MSEK Net Sales until FY25/26 Sustainability linked loan connected to two KPIs: CO2e per shipment and number of takebacks. D
Slide 12: Summary of the second quarter 2022/23
Summary of the second quarter 2022/23 Improved inventory levels and strengthened margin from the first quarter Net sales grew 2.2% to 6,272 (6,137) MSEK • Group organic net sales growth of -2.4% in constant currency • Organic growth in SMB of -10.0% and in LCP of 1.1% Gross profit of 914 (904) MSEK
Slide 13: Corporate presentation
Corporate presentation C Dustin
Slide 14: 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 15: 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 16: 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 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 ~40% 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: 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 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: Thank you
Thank you © Dustin