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Proact

Proact

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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 2019 2020e 2021e
Sales 3436 3808 3905
Sales growth (%) 3,6 10,8 2,5
EBITDA 284 336 367
EBITDA margin (%) 8,3 8,8 9,4
EBIT adj 147 172 207
EBIT adj margin (%) 4,3 4,5 5,3
Pretax profit 129 172 206
EPS rep 10,54 14,29 16,99
EPS growth (%) -24,2 35,6 18,9
EPS adj 15,81 17,79 20,16
DPS 3,16 4,29 5,1
EV/EBITDA (x) 5,6 4,5 3,8
EV/EBIT adj (x) 10,8 8,7 6,7
P/E (x) 14,8 10,9 9,2
P/E adj (x) 9,9 8,8 7,7
EV/sales (x) 0,5 0,4 0,4
FCF yield (%) -2,7 14,4 16,2
Dividend yield (%) 2 2,7 3,3
Net IB debt/EBITDA 0,6 0,2 -0,1
SEKm 2019 2020e 2021e
Sales 3436 3808 3905
COGS -2645 -2932 -3007
Gross profit 791 876 898
Other operating items -507 -540 -531
EBITDA 284 336 367
Depreciation on tangibles -41 -44 -43
Depreciation on intangibles 0 0 0
EBITA 154 204 236
Goodwill impairment charges 0 0 0
Other impairment and amortisation -28 -32 -29
EBIT 126 172 207
Other financial items 0 0 0
Net financial items 2 0 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 129 172 206
Tax -32 -41 -50
Net profit 96 131 155
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 96 131 155
EPS 10,54 14,29 16,99
EPS Adj 15,81 17,79 20,16
Total extraordinary items after tax -20,2 0 0
Tax rate (%) -25,1 -24 -24,5
Gross margin (%) 23 23 23
EBITDA margin (%) 8,3 8,8 9,4
EBITA margin (%) 4,5 5,4 6
EBIT margin (%) 3,7 4,5 5,3
Pretax margin (%) 3,7 4,5 5,3
Net margin (%) 2,8 3,4 4
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 3,6 10,8 2,5
EBITDA growth (%) 22,8 18,4 9,2
EBIT growth (%) -23,1 36,1 20,3
Net profit growth (%) -24,2 35,6 18,9
EPS growth (%) -24,2 35,6 18,9
Profitability 2019 2020 2021
ROE (%) 19,4 22,7 22,7
ROE Adj (%) 29,1 28,2 26,9
ROCE (%) 16,7 16,9 18,2
ROCE Adj(%) 22,8 20 20,8
ROIC (%) 10,3 11,8 14
ROIC Adj (%) 11,9 11,8 14
Adj earnings numbers 2019 2020 2021
EBITDA Adj 304 336 367
EBITDA Adj margin (%) 8,8 8,8 9,4
EBITA Adj 175 204 236
EBITA Adj margin (%) 5,1 5,4 6
EBIT Adj 147 172 207
EBIT Adj margin (%) 4,3 4,5 5,3
Pretax profit Adj 177 204 235
Net profit Adj 145 163 184
Net profit to shareholders Adj 145 163 184
Net Adj margin (%) 4,2 4,3 4,7
SEKm 2019 2020e 2021e
EBITDA 284 336 367
Net financial items 2 0 -1
Paid tax -32 -41 -50
Non-cash items 0 0 0
Cash flow before change in WC 254 295 315
Change in WC -30 -11 -2
Operating cash flow 223 284 313
CAPEX tangible fixed assets -45 -47 -50
CAPEX intangible fixed assets -30 -31 -32
Acquisitions and disposals -187 0 0
Free cash flow -39 206 231
Dividend paid -38 -29 -39
Share issues and buybacks 0 0 0
Other non cash items -133 0 0
Decrease in net IB debt -297 89 104
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 487 487 487
Indefinite intangible assets 0 0 0
Definite intangible assets 72 71 74
Tangible fixed assets 77 80 87
Other fixed assets 308 308 308
Fixed assets 1169 1171 1181
Inventories 34 38 39
Receivables 1065 1192 1222
Other current assets 0 0 0
Cash and liquid assets 305 394 498
Total assets 2574 2795 2940
Shareholders equity 526 628 744
Minority 2 2 2
Total equity 528 630 746
Long-term debt 120 120 120
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 21 21 21
Other long-term liabilities 331 331 331
Short-term debt 85 85 85
Accounts payable 584 644 656
Other current liabilities 648 707 724
Total liabilities and equity 1832 2213 2574
Net IB debt 157 69 -35
Net IB debt excl. pension debt 157 69 -35
Capital invested 1097 1110 1123
Working capital -72 -61 -59
EV breakdown 2019 2020 2021
Market cap. diluted (m) 1428 1428 1428
Net IB debt Adj 157 69 -35
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 1587 1498 1394
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 143,6 141,8 136,2
Capital invested turnover (%) 373,6 345 349,7
Capital employed turnover (%) 432,1 365,5 339,3
Inventories / sales (%) 0,9 1 1
Customer advances / sales (%) 16,9 16,2 16,8
Payables / sales (%) 17,6 16,1 16,6
Working capital / sales (%) -2,5 -1,7 -1,5
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 29,8 10,9 -4,7
Net debt / market cap (%) 8,7 4,8 -2,5
Equity ratio (%) 20,5 22,5 25,4
Net IB debt adj. / equity (%) 29,8 10,9 -4,7
Current ratio (%) 103,5 110 116,9
EBITDA / net interest (%) -11822,8 0 36694,1
Net IB debt / EBITDA (%) 55,5 20,5 -9,6
Interest cover (%) 4021,2 5201,4 5973,5
SEKm 2019 2020e 2021e
Shares outstanding adj. 9 9 9
Fully diluted shares Adj 9 9 9
EPS 10,54 14,29 16,99
Dividend per share Adj 3,2 4,3 5,1
EPS Adj 15,81 17,79 20,16
BVPS 57,51 68,63 81,34
BVPS Adj -3,59 7,65 20,03
Net IB debt / share 17,2 7,5 -3,8
Share price 196,81 156 156
Market cap. (m) 1801 1428 1428
Valuation 2019 2020 2021
P/E 14,8 10,9 9,2
EV/sales 0,46 0,39 0,36
EV/EBITDA 5,6 4,5 3,8
EV/EBITA 10,3 7,3 5,9
EV/EBIT 12,5 8,7 6,7
Dividend yield (%) 2 2,7 3,3
FCF yield (%) -2,7 14,4 16,2
P/BVPS 2,71 2,27 1,92
P/BVPS Adj -43,5 20,39 7,79
P/E Adj 9,9 8,8 7,7
EV/EBITDA Adj 5,2 4,5 3,8
EV/EBITA Adj 9,1 7,3 5,9
EV/EBIT Adj 10,8 8,7 6,7
EV/cap. employed 1,6 1,4 1,2
Investment ratios 2019 2020 2021
Capex / sales 2,2 2 2,1
Capex / depreciation 181,6 177,3 190,7
Capex tangibles / tangible fixed assets 58,4 58,7 57,4
Capex intangibles / definite intangibles 41,4 43,4 43
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 53,6 54,9 49,4

Equity Research

Media

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

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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 7.7 % 7.7 % 31 Dec 2019
Triton 7.0 % 7.0 % 11 Dec 2019
Skandia Fonder 6.9 % 6.9 % 31 Dec 2019
Avanza Pension 4.9 % 4.9 % 31 Dec 2019
Unionen 4.0 % 4.0 % 31 Dec 2019
Canaccord Genuity Wealth Management 2.8 % 2.8 % 30 Sep 2019
Handelsbanken Fonder 2.4 % 2.4 % 31 Dec 2019
Fondita Fonder 2.1 % 2.1 % 31 Oct 2019
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
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
Martin Thompson + 412 BUY 3 Dec 2019
Jacob Kronborg + 340 BUY 29 Nov 2019
Dmitrijs Sarafutdinovs + 340 BUY 28 Nov 2019

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