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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.>

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 3481 3585
Sales growth (%) 1,8 4,9 3
EBITDA 231 290 343
EBITDA margin (%) 7 8,3 9,6
EBIT adj 167 159 194
EBIT adj margin (%) 5 4,6 5,4
Pretax profit 168 141 193
EPS rep 13,9 11,72 15,89
EPS growth (%) 12,6 -15,7 35,6
EPS adj 17,61 16,85 18,84
DPS 4,15 4,55 5
EV/EBITDA (x) 5,9 4,9 3,9
EV/EBIT adj (x) 8,1 9 7
P/E (x) 11,8 13,3 9,8
P/E adj (x) 9,3 9,3 8,3
EV/sales (x) 0,4 0,4 0,4
FCF yield (%) 6,8 10,1 13,2
Dividend yield (%) 2,5 2,9 3,2
Net IB debt/EBITDA -0,6 0 -0,2
SEKm 2018 2019e 2020e
Sales 3318 3481 3585
COGS -2526 -2695 -2778
Gross profit 792 785 807
Other operating items -561 -495 -464
EBITDA 231 290 343
Depreciation on tangibles -31 -125 -122
Depreciation on intangibles 0 0 0
EBITA 200 165 221
Goodwill impairment charges -5 0 0
Other impairment and amortisation -31 -27 -27
EBIT 165 139 194
Other financial items 0 0 0
Net financial items 3 3 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 168 141 193
Tax -41 -34 -47
Net profit 127 107 145
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 127 107 145
EPS 13,9 11,72 15,89
EPS Adj 17,61 16,85 18,84
Total extraordinary items after tax 1,9 -20,2 0
Tax rate (%) -24,2 -24,1 -24,5
Gross margin (%) 23,9 22,6 22,5
EBITDA margin (%) 7 8,3 9,6
EBITA margin (%) 6 4,8 6,2
EBIT margin (%) 5 4 5,4
Pretax margin (%) 5,1 4,1 5,4
Net margin (%) 3,8 3,1 4,1
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 1,8 4,9 3
EBITDA growth (%) 5,3 25,7 18
EBIT growth (%) 4,8 -15,7 39,7
Net profit growth (%) 10,7 -15,8 35,6
EPS growth (%) 12,6 -15,7 35,6
Profitability 2018 2019 2020
ROE (%) 29,8 21,3 24,7
ROE Adj (%) 37,7 30,7 29,3
ROCE (%) 30,6 19,3 20,5
ROCE Adj(%) 36,6 25,6 23,4
ROIC (%) 19,6 12,4 15,2
ROIC Adj (%) 19,9 14,2 15,2
Adj earnings numbers 2018 2019 2020
EBITDA Adj 229 311 343
EBITDA Adj margin (%) 6,9 8,9 9,6
EBITA Adj 199 186 221
EBITA Adj margin (%) 6 5,3 6,2
EBIT Adj 167 159 194
EBIT Adj margin (%) 5 4,6 5,4
Pretax profit Adj 202 188 220
Net profit Adj 161 154 172
Net profit to shareholders Adj 161 154 172
Net Adj margin (%) 4,9 4,4 4,8
SEKm 2018 2019e 2020e
EBITDA 231 290 343
Net financial items 3 3 -1
Paid tax -41 -34 -47
Non-cash items 0 0 0
Cash flow before change in WC 194 259 294
Change in WC -17 -30 -16
Operating cash flow 243 230 279
CAPEX tangible fixed assets -81 -65 -67
CAPEX intangible fixed assets 0 -20 -23
Acquisitions and disposals -60 0 0
Free cash flow 102 145 189
Dividend paid -35 -38 -42
Share issues and buybacks 0 0 0
Other non cash items -203 -251 -61
Decrease in net IB debt 53 -144 87
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 393 393 393
Indefinite intangible assets 0 0 0
Definite intangible assets 70 64 59
Tangible fixed assets 73 263 269
Other fixed assets 308 308 308
Fixed assets 845 1028 1030
Inventories 31 35 36
Receivables 1068 1079 1122
Other current assets 0 0 0
Cash and liquid assets 270 362 449
Total assets 2213 2504 2636
Shareholders equity 468 537 641
Minority 2 2 2
Total equity 470 539 643
Long-term debt 120 282 282
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 628 592 606
Other current liabilities 633 655 669
Total liabilities and equity 1807 1832 2213
Net IB debt -140 5 -82
Net IB debt excl. pension debt -140 5 -82
Capital invested 743 955 972
Working capital -103 -73 -57
EV breakdown 2018 2019 2020
Market cap. diluted (m) 1495 1429 1429
Net IB debt Adj -140 5 -82
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 1436 1349
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 164 147,6 139,5
Capital invested turnover (%) 521,9 410 372
Capital employed turnover (%) 590 462,5 374,4
Inventories / sales (%) 1 0,9 1
Customer advances / sales (%) 17,3 16,8 16,8
Payables / sales (%) 17,1 17,5 16,7
Working capital / sales (%) -3,4 -2,5 -1,8
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -29,8 0,9 -12,7
Net debt / market cap (%) -9,1 0,3 -5,7
Equity ratio (%) 21,2 21,5 24,4
Net IB debt adj. / equity (%) -29,8 0,9 -12,7
Current ratio (%) 107,7 110,8 118,1
EBITDA / net interest (%) -6794,1 -10756,1 34259,5
Net IB debt / EBITDA (%) -60,5 1,6 -23,9
Interest cover (%) 5195 4302,8 5589,9
SEKm 2018 2019e 2020e
Shares outstanding adj. 9 9 9
Fully diluted shares Adj 9 9 9
EPS 13,9 11,72 15,89
Dividend per share Adj 4,2 4,5 5
EPS Adj 17,61 16,85 18,84
BVPS 51,12 58,68 70,02
BVPS Adj 0,46 8,77 20,6
Net IB debt / share -15,3 0,5 -8,9
Share price 167,74 156,2 156,2
Market cap. (m) 1535 1429 1429
Valuation 2018 2019 2020
P/E 11,8 13,3 9,8
EV/sales 0,41 0,41 0,38
EV/EBITDA 5,9 4,9 3,9
EV/EBITA 6,8 8,7 6,1
EV/EBIT 8,3 10,4 7
Dividend yield (%) 2,5 2,9 3,2
FCF yield (%) 6,8 10,1 13,2
P/BVPS 3,2 2,66 2,23
P/BVPS Adj 356,04 17,81 7,58
P/E Adj 9,3 9,3 8,3
EV/EBITDA Adj 5,9 4,6 3,9
EV/EBITA Adj 6,8 7,7 6,1
EV/EBIT Adj 8,1 9 7
EV/cap. employed 2,3 1,6 1,3
Investment ratios 2018 2019 2020
Capex / sales 2,4 2,4 2,5
Capex / depreciation 265 68 73,4
Capex tangibles / tangible fixed assets 110,5 24,7 24,9
Capex intangibles / definite intangibles 0 31,4 38,1
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 41,7 47,5 45,3

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 Jun 2019
Livförsäkringsbolaget Skandia 10.9 % 10.9 % 30 Jun 2019
Triton 8.0 % 8.0 % 30 Jun 2018
Länsförsäkringar Fonder 6.9 % 6.9 % 31 Aug 2019
Skandia Fonder 6.9 % 6.9 % 31 Aug 2019
Unionen 3.6 % 3.6 % 30 Jun 2019
Handelsbanken Fonder 3.1 % 3.1 % 31 Aug 2019
Canaccord Genuity Wealth Management 2.8 % 2.8 % 31 May 2019
Humle Fonder 2.4 % 2.4 % 31 Aug 2019
Avanza Pension 2.2 % 2.2 % 30 Jun 2019
Source: Holdings by Modular Finance AB

Insider list

Proact

Name Quantity Code Date
Lars Arne Erland Kungberg - 7 051 SELL 22 Mar 2019
Oliver Kuegow - 844 SELL 22 Mar 2019
Oliver Kuegow - 974 SELL 22 Mar 2019
Oliver Kuegow - 89 SELL 22 Mar 2019
Oliver Kuegow - 1 395 SELL 22 Mar 2019
Oliver Kuegow - 141 SELL 22 Mar 2019
Oliver Kuegow - 30 653 SELL 22 Mar 2019
Oliver Kuegow - 566 SELL 22 Mar 2019
Oliver Kuegow - 2 554 SELL 22 Mar 2019
Oliver Kuegow - 21 639 SELL 22 Mar 2019

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