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Proact

Specialist in critical data storage

Proact is a value-added reseller (VAR) of storage and the largest storage specialist in Europe. It tailor-makes storage solutions for big companies with complex and critical storage requirements. Its sales consist of hardware and software sales of third-party products, consulting, support and cloud services. Financial targets: 1) Growth >10% p.a., 2) EBITA margin >8%, 3) Net debt/EBITDA <2x, 4) roce of 25%, and 5) 25-35% payout ratio.></2x,>

Proact is the largest storage specialist in Europe and is thus well positioned to capture growth in the data storage market. Proact has a fast-growing enterprise cloud solution that benefits from the strong cloud trend while also being local (on-premise or data centre) to avoid competition from global standardised cloud storage. An increasing share of cloud would raise margins.

For Proact’s traditional operations (system sales), the key risk comes from a potentially challenging outlook for the server/storage market given the shift towards cloud instead of local storage. For its cloud operations, there is the risk that some business will be lost to data centres and cheaper global cloud solutions.

Financials

SEKm 2018 2019e 2020e
Sales 3318 3436 3808
Sales growth (%) 1,8 3,6 10,8
EBITDA 231 284 336
EBITDA margin (%) 7 8,3 8,8
EBIT adj 167 147 172
EBIT adj margin (%) 5 4,3 4,5
Pretax profit 168 129 172
EPS rep 13,9 10,54 14,29
EPS growth (%) 12,6 -24,2 35,6
EPS adj 17,61 15,81 17,79
DPS 4,15 3,16 4,29
EV/EBITDA (x) 5,9 6,1 4,9
EV/EBIT adj (x) 8,1 11,9 9,6
P/E (x) 11,8 16,4 12,1
P/E adj (x) 9,3 10,9 9,7
EV/sales (x) 0,4 0,5 0,4
FCF yield (%) 6,8 -2,4 13
Dividend yield (%) 2,5 1,8 2,5
Net IB debt/EBITDA -0,6 0,6 0,2
SEKm 2018 2019e 2020e
Sales 3318 3436 3808
COGS -2526 -2645 -2932
Gross profit 792 791 876
Other operating items -561 -507 -540
EBITDA 231 284 336
Depreciation on tangibles -31 -41 -44
Depreciation on intangibles 0 0 0
EBITA 200 154 204
Goodwill impairment charges -5 0 0
Other impairment and amortisation -31 -28 -32
EBIT 165 126 172
Other financial items 0 0 0
Net financial items 3 2 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 168 129 172
Tax -41 -32 -41
Net profit 127 96 131
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 127 96 131
EPS 13,9 10,54 14,29
EPS Adj 17,61 15,81 17,79
Total extraordinary items after tax 1,9 -20,2 0
Tax rate (%) -24,2 -25,1 -24
Gross margin (%) 23,9 23 23
EBITDA margin (%) 7 8,3 8,8
EBITA margin (%) 6 4,5 5,4
EBIT margin (%) 5 3,7 4,5
Pretax margin (%) 5,1 3,7 4,5
Net margin (%) 3,8 2,8 3,4
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 1,8 3,6 10,8
EBITDA growth (%) 5,3 22,8 18,4
EBIT growth (%) 4,8 -23,1 36,1
Net profit growth (%) 10,7 -24,2 35,6
EPS growth (%) 12,6 -24,2 35,6
Profitability 2018 2019 2020
ROE (%) 29,8 19,4 22,7
ROE Adj (%) 37,7 29,1 28,2
ROCE (%) 30,6 16,7 16,9
ROCE Adj(%) 36,6 22,8 20
ROIC (%) 19,6 10,3 11,8
ROIC Adj (%) 19,9 11,9 11,8
Adj earnings numbers 2018 2019 2020
EBITDA Adj 229 304 336
EBITDA Adj margin (%) 6,9 8,8 8,8
EBITA Adj 199 175 204
EBITA Adj margin (%) 6 5,1 5,4
EBIT Adj 167 147 172
EBIT Adj margin (%) 5 4,3 4,5
Pretax profit Adj 202 177 204
Net profit Adj 161 145 163
Net profit to shareholders Adj 161 145 163
Net Adj margin (%) 4,9 4,2 4,3
SEKm 2018 2019e 2020e
EBITDA 231 284 336
Net financial items 3 2 0
Paid tax -41 -32 -41
Non-cash items 0 0 0
Cash flow before change in WC 194 254 295
Change in WC -17 -30 -11
Operating cash flow 243 223 284
CAPEX tangible fixed assets -81 -45 -47
CAPEX intangible fixed assets 0 -30 -31
Acquisitions and disposals -60 -187 0
Free cash flow 102 -39 206
Dividend paid -35 -38 -29
Share issues and buybacks 0 0 0
Other non cash items -203 -133 0
Decrease in net IB debt 53 -297 89
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 393 487 487
Indefinite intangible assets 0 0 0
Definite intangible assets 70 72 71
Tangible fixed assets 73 77 80
Other fixed assets 308 308 308
Fixed assets 845 1169 1171
Inventories 31 34 38
Receivables 1068 1065 1192
Other current assets 0 0 0
Cash and liquid assets 270 305 394
Total assets 2213 2574 2795
Shareholders equity 468 526 628
Minority 2 2 2
Total equity 470 528 630
Long-term debt 120 120 120
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 22 21 21
Other long-term liabilities 331 331 331
Short-term debt 10 85 85
Accounts payable 628 584 644
Other current liabilities 633 648 707
Total liabilities and equity 1807 1832 2213
Net IB debt -140 157 69
Net IB debt excl. pension debt -140 157 69
Capital invested 743 1097 1110
Working capital -103 -72 -61
EV breakdown 2018 2019 2020
Market cap. diluted (m) 1495 1580 1580
Net IB debt Adj -140 157 69
Market value of minority 2 2 2
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 1357 1739 1650
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 164 143,6 141,8
Capital invested turnover (%) 521,9 373,6 345
Capital employed turnover (%) 590 432,1 365,5
Inventories / sales (%) 1 0,9 1
Customer advances / sales (%) 17,3 16,9 16,2
Payables / sales (%) 17,1 17,6 16,1
Working capital / sales (%) -3,4 -2,5 -1,7
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -29,8 29,8 10,9
Net debt / market cap (%) -9,1 10 4,4
Equity ratio (%) 21,2 20,5 22,5
Net IB debt adj. / equity (%) -29,8 29,8 10,9
Current ratio (%) 107,7 103,5 110
EBITDA / net interest (%) -6794,1 -11822,8 0
Net IB debt / EBITDA (%) -60,5 55,5 20,5
Interest cover (%) 5195 4021,2 5201,4
SEKm 2018 2019e 2020e
Shares outstanding adj. 9 9 9
Fully diluted shares Adj 9 9 9
EPS 13,9 10,54 14,29
Dividend per share Adj 4,2 3,2 4,3
EPS Adj 17,61 15,81 17,79
BVPS 51,12 57,51 68,63
BVPS Adj 0,46 -3,59 7,65
Net IB debt / share -15,3 17,2 7,5
Share price 167,74 172,6 172,6
Market cap. (m) 1535 1580 1580
Valuation 2018 2019 2020
P/E 11,8 16,4 12,1
EV/sales 0,41 0,51 0,43
EV/EBITDA 5,9 6,1 4,9
EV/EBITA 6,8 11,3 8,1
EV/EBIT 8,3 13,8 9,6
Dividend yield (%) 2,5 1,8 2,5
FCF yield (%) 6,8 -2,4 13
P/BVPS 3,2 3 2,51
P/BVPS Adj 356,04 -48,13 22,56
P/E Adj 9,3 10,9 9,7
EV/EBITDA Adj 5,9 5,7 4,9
EV/EBITA Adj 6,8 10 8,1
EV/EBIT Adj 8,1 11,9 9,6
EV/cap. employed 2,3 1,8 1,5
Investment ratios 2018 2019 2020
Capex / sales 2,4 2,2 2
Capex / depreciation 265 181,6 177,3
Capex tangibles / tangible fixed assets 110,5 58,4 58,7
Capex intangibles / definite intangibles 0 41,4 43,4
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 41,7 53,6 54,9

Equity Research

Media

Proact - Interview with CEO Jonas Hasselberg (in Swedish)
Proact - Company presentation with CEO Jonas Hasselberg (in Swedish)

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Main shareholders - Proact

Main shareholders Share capital % Voting shares % Verified
Martin Gren (Grenspecialisten) 11.2 % 11.2 % 30 Sep 2019
Livförsäkringsbolaget Skandia 10.9 % 10.9 % 30 Sep 2019
Triton 8.0 % 8.0 % 30 Jun 2018
Länsförsäkringar Fonder 7.1 % 7.1 % 31 Oct 2019
Skandia Fonder 6.9 % 6.9 % 31 Oct 2019
Avanza Pension 5.2 % 5.2 % 17 Oct 2019
Unionen 4.0 % 4.0 % 30 Sep 2019
Canaccord Genuity Wealth Management 2.8 % 2.8 % 31 Jul 2019
Fondita Fonder 2.0 % 2.0 % 31 Aug 2019
Öhman Fonder 2.0 % 2.0 % 30 Sep 2019
Source: Holdings by Modular Finance AB

Insider list - Proact

Name Quantity Code Date
Eva Maria Cecilia Sandell Elmstedt + 1 595 BUY 12 Nov 2019
Eva Maria Cecilia Sandell Elmstedt - 1 595 SELL 12 Nov 2019
Karel Kannel + 340 BUY 11 Nov 2019
Richardas Pivoriunas + 340 BUY 8 Nov 2019
Richardas Pivoriunas + 340 BUY 8 Nov 2019
Danny Duggal + 450 BUY 7 Nov 2019
Petra Tesch - 100 SELL 4 Nov 2019
Petra Tesch - 100 SELL 4 Nov 2019
Mika Nyholm + 340 BUY 31 Oct 2019
Sara Dahlström Ossborn + 450 BUY 21 Oct 2019

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