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Proact

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.

SEKm 2019 2020e 2021e
Sales 3408 3767 3866
Sales growth (%) 2,7 10,5 2,6
EBITDA 272 358 391
EBITDA margin (%) 8 9,5 10,1
EBIT adj 137 159 193
EBIT adj margin (%) 4 4,2 5
Pretax profit 102 159 192
EPS rep 8,75 13,23 15,87
EPS growth (%) -37 51,2 19,9
EPS adj 15,33 17,03 19,45
DPS 4,15 3,97 4,76
EV/EBITDA (x) 7 2,5 2
EV/EBIT adj (x) 13,8 5,7 4,1
P/E (x) 21 6,9 5,8
P/E adj (x) 12 5,4 4,7
EV/sales (x) 0,6 0,2 0,2
FCF yield (%) 7,3 26,4 31,7
Dividend yield (%) 2,3 4,3 5,2
Net IB debt/EBITDA 0,8 0,2 -0,1
SEKm 2019 2020e 2021e
Sales 3408 3767 3866
COGS -2619 -2890 -2965
Gross profit 789 877 901
Other operating items -517 -519 -510
EBITDA 272 358 391
Depreciation on tangibles -38 -60 -61
Depreciation on intangibles 0 0 0
EBITA 134 194 226
Goodwill impairment charges 0 0 0
Other impairment and amortisation -29 -35 -33
EBIT 105 159 193
Other financial items 0 0 0
Net financial items -4 0 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 102 159 192
Tax -22 -38 -47
Net profit 80 121 145
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 80 121 145
EPS 8,75 13,23 15,87
EPS Adj 15,33 17,03 19,45
Total extraordinary items after tax -31,5 0 0
Tax rate (%) -21,2 -24 -24,5
Gross margin (%) 23,1 23,3 23,3
EBITDA margin (%) 8 9,5 10,1
EBITA margin (%) 3,9 5,2 5,8
EBIT margin (%) 3,1 4,2 5
Pretax margin (%) 3 4,2 5
Net margin (%) 2,4 3,2 3,8
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 2,7 10,5 2,6
EBITDA growth (%) 17,6 31,8 9,2
EBIT growth (%) -35,9 51,1 21,3
Net profit growth (%) -37,1 51,2 19,9
EPS growth (%) -37 51,2 19,9
Profitability 2019 2020 2021
ROE (%) 16,1 21,4 21,9
ROE Adj (%) 28,3 27,6 26,9
ROCE (%) 12,4 14,2 15,8
ROCE Adj(%) 19,4 17,3 18,4
ROIC (%) 9,1 10,9 13,6
ROIC Adj (%) 11,8 10,9 13,6
Adj earnings numbers 2019 2020 2021
EBITDA Adj 303 358 391
EBITDA Adj margin (%) 8,9 9,5 10,1
EBITA Adj 166 194 226
EBITA Adj margin (%) 4,9 5,2 5,8
EBIT Adj 137 159 193
EBIT Adj margin (%) 4 4,2 5
Pretax profit Adj 162 194 225
Net profit Adj 140 156 178
Net profit to shareholders Adj 140 156 178
Net Adj margin (%) 4,1 4,1 4,6
SEKm 2019 2020e 2021e
EBITDA 272 358 391
Net financial items -4 0 -1
Paid tax -22 -38 -47
Non-cash items 0 0 0
Cash flow before change in WC 246 320 343
Change in WC 57 40 5
Operating cash flow 330 300 348
CAPEX tangible fixed assets -53 -47 -50
CAPEX intangible fixed assets 0 -31 -32
Acquisitions and disposals -153 0 0
Free cash flow 123 222 266
Dividend paid -38 -38 -36
Share issues and buybacks 0 0 0
Other non cash items -321 0 0
Decrease in net IB debt -348 140 126
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 516 516 516
Indefinite intangible assets 0 0 0
Definite intangible assets 93 89 89
Tangible fixed assets 159 146 135
Other fixed assets 367 367 367
Fixed assets 1361 1344 1332
Inventories 20 26 27
Receivables 1122 1205 1237
Other current assets 0 0 0
Cash and liquid assets 373 513 639
Total assets 2877 3089 3235
Shareholders equity 524 607 716
Minority 2 2 2
Total equity 526 609 718
Long-term debt 236 236 236
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 28 28 28
Other long-term liabilities 379 379 379
Short-term debt 87 87 87
Accounts payable 780 791 812
Other current liabilities 583 700 717
Total liabilities and equity 2877 3089 3235
Net IB debt 208 68 -58
Net IB debt excl. pension debt 208 68 -58
Capital invested 1141 1085 1067
Working capital -220 -260 -265
EV breakdown 2019 2020 2021
Market cap. diluted (m) 1684 840 840
Net IB debt Adj 208 68 -58
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 1893 910 784
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 133,9 126,3 122,3
Capital invested turnover (%) 373,8 338,5 359,3
Capital employed turnover (%) 399,4 328 310,7
Inventories / sales (%) 0,7 0,6 0,7
Customer advances / sales (%) 17 16,2 16,8
Payables / sales (%) 20,7 20,8 20,7
Working capital / sales (%) -5,6 -6,4 -6,8
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 39,5 11,2 -8,1
Net debt / market cap (%) 11,5 8,1 -6,9
Equity ratio (%) 18,3 19,7 22,2
Net IB debt adj. / equity (%) 39,5 11,2 -8,1
Current ratio (%) 101,7 107,8 114,9
EBITDA / net interest (%) 7150 0 39110,8
Net IB debt / EBITDA (%) 76,4 19 -14,8
Interest cover (%) 3357,5 4952,7 5727,7
SEKm 2019 2020e 2021e
Shares outstanding adj. 9 9 9
Fully diluted shares Adj 9 9 9
EPS 8,75 13,23 15,87
Dividend per share Adj 4,2 4 4,8
EPS Adj 15,33 17,03 19,45
BVPS 57,28 66,36 78,26
BVPS Adj -9,33 0,16 12,15
Net IB debt / share 22,7 7,4 -6,3
Share price 196,81 91,8 91,8
Market cap. (m) 1801 840 840
Valuation 2019 2020 2021
P/E 21 6,9 5,8
EV/sales 0,56 0,24 0,2
EV/EBITDA 7 2,5 2
EV/EBITA 14,1 4,7 3,5
EV/EBIT 18 5,7 4,1
Dividend yield (%) 2,3 4,3 5,2
FCF yield (%) 7,3 26,4 31,7
P/BVPS 3,21 1,38 1,17
P/BVPS Adj -19,72 561,51 7,56
P/E Adj 12 5,4 4,7
EV/EBITDA Adj 6,2 2,5 2
EV/EBITA Adj 11,4 4,7 3,5
EV/EBIT Adj 13,8 5,7 4,1
EV/cap. employed 1,7 0,8 0,6
Investment ratios 2019 2020 2021
Capex / sales 1,6 2,1 2,1
Capex / depreciation 141,5 130 134,4
Capex tangibles / tangible fixed assets 33,4 32,1 37
Capex intangibles / definite intangibles 0 34,7 36,1
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 23,6 41 45,1

Equity Research

Media

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

Main shareholders - Proact

Main shareholders Share capital % Voting shares % Verified
Martin Gren (Grenspecialisten) 11.2 % 11.2 % 31 Dec 2019
Livförsäkringsbolaget Skandia 11.0 % 11.0 % 31 Dec 2019
Länsförsäkringar Fonder 8.6 % 8.6 % 31 Mar 2020
Triton 7.0 % 7.0 % 11 Dec 2019
Skandia Fonder 6.9 % 6.9 % 29 Feb 2020
Avanza Pension 5.4 % 5.4 % 12 Mar 2020
Unionen 4.0 % 4.0 % 31 Dec 2019
Canaccord Genuity Wealth Management 2.8 % 2.8 % 31 Dec 2019
Handelsbanken Fonder 2.4 % 2.4 % 29 Feb 2020
Fondita Fonder 2.3 % 2.3 % 31 Jan 2020
Source: Holdings by Modular Finance AB

Insider list - Proact

Name Quantity Code Date
SB DEKKER + 450 BUY 31 Dec 2019
Sander DEKKER + 450 BUY 31 Dec 2019
Maria Catharina Bergström - 150 SELL 23 Dec 2019
Martin Thompson + 38 BUY 11 Dec 2019
Ellen Grasbakken + 340 BUY 10 Dec 2019
Martin Thompson + 412 BUY 3 Dec 2019
Jacob Kronborg + 340 BUY 29 Nov 2019
Peter Mikael Javestad + 450 BUY 28 Nov 2019
Jan Anders Jonas Persson + 450 BUY 28 Nov 2019
Dmitrijs Sarafutdinovs + 340 BUY 28 Nov 2019

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