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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 3408 3560 3692
Sales growth (%) 2,7 4,5 3,7
EBITDA 272 344 364
EBITDA margin (%) 8 9,7 9,9
EBIT adj 137 146 166
EBIT adj margin (%) 4 4,1 4,5
Pretax profit 102 145 165
EPS rep 8,75 12,14 13,62
EPS growth (%) -37 38,7 12,2
EPS adj 15,33 15,92 17,19
DPS 0 3,64 4,09
EV/EBITDA (x) 7 4,8 4,2
EV/EBIT adj (x) 13,8 11,2 9,2
P/E (x) 21 14,3 12,7
P/E adj (x) 12 10,9 10,1
EV/sales (x) 0,6 0,5 0,4
FCF yield (%) 7,3 12,6 15,6
Dividend yield (%) 0 2,1 2,4
Net IB debt/EBITDA 0,8 0,2 -0,2
SEKm 2019 2020e 2021e
Sales 3408 3560 3692
COGS -2619 -2728 -2832
Gross profit 789 832 860
Other operating items -517 -488 -497
EBITDA 272 344 364
Depreciation on tangibles -38 -59 -61
Depreciation on intangibles 0 0 0
EBITA 134 181 199
Goodwill impairment charges 0 0 0
Other impairment and amortisation -29 -35 -33
EBIT 105 146 166
Other financial items 0 0 0
Net financial items -4 -1 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 102 145 165
Tax -22 -34 -40
Net profit 80 111 125
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 80 111 125
EPS 8,75 12,14 13,62
EPS Adj 15,33 15,92 17,19
Total extraordinary items after tax -31,5 0 0
Tax rate (%) -21,2 -23,7 -24,5
Gross margin (%) 23,1 23,4 23,3
EBITDA margin (%) 8 9,7 9,9
EBITA margin (%) 3,9 5,1 5,4
EBIT margin (%) 3,1 4,1 4,5
Pretax margin (%) 3 4,1 4,5
Net margin (%) 2,4 3,1 3,4
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 2,7 4,5 3,7
EBITDA growth (%) 17,6 26,6 5,8
EBIT growth (%) -35,9 38,6 13,7
Net profit growth (%) -37,1 38,5 12,4
EPS growth (%) -37 38,7 12,2
Profitability 2019 2020 2021
ROE (%) 16,1 19,2 18,3
ROE Adj (%) 28,3 25,1 23,1
ROCE (%) 12,4 12,9 13,4
ROCE Adj(%) 19,4 15,8 16
ROIC (%) 9,1 10 11,5
ROIC Adj (%) 11,8 10 11,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 303 344 364
EBITDA Adj margin (%) 8,9 9,7 9,9
EBITA Adj 166 181 199
EBITA Adj margin (%) 4,9 5,1 5,4
EBIT Adj 137 146 166
EBIT Adj margin (%) 4 4,1 4,5
Pretax profit Adj 162 180 198
Net profit Adj 140 146 157
Net profit to shareholders Adj 140 146 157
Net Adj margin (%) 4,1 4,1 4,3
SEKm 2019 2020e 2021e
EBITDA 272 344 364
Net financial items -4 -1 -1
Paid tax -22 -34 -40
Non-cash items 0 0 0
Cash flow before change in WC 246 309 322
Change in WC 57 29 7
Operating cash flow 330 277 329
CAPEX tangible fixed assets -53 -47 -50
CAPEX intangible fixed assets 0 -31 -32
Acquisitions and disposals -153 0 0
Free cash flow 123 199 247
Dividend paid -38 0 -33
Share issues and buybacks 0 0 0
Other non cash items -321 0 0
Decrease in net IB debt -348 155 110
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 516 516 516
Indefinite intangible assets 0 0 0
Definite intangible assets 93 90 89
Tangible fixed assets 159 147 136
Other fixed assets 367 367 367
Fixed assets 1361 1345 1334
Inventories 20 25 26
Receivables 1122 1139 1182
Other current assets 0 0 0
Cash and liquid assets 373 529 639
Total assets 2877 3038 3180
Shareholders equity 524 635 727
Minority 2 2 2
Total equity 526 637 728
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 780 748 775
Other current liabilities 583 665 688
Total liabilities and equity 2877 3038 3180
Net IB debt 208 52 -58
Net IB debt excl. pension debt 208 52 -58
Capital invested 1141 1097 1078
Working capital -220 -249 -256
EV breakdown 2019 2020 2021
Market cap. diluted (m) 1684 1585 1585
Net IB debt Adj 208 52 -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 1639 1529
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 133,9 120,4 118,8
Capital invested turnover (%) 373,8 318,2 339,6
Capital employed turnover (%) 399,4 306,3 292,2
Inventories / sales (%) 0,7 0,6 0,7
Customer advances / sales (%) 17 16,7 16,7
Payables / sales (%) 20,7 21,5 20,6
Working capital / sales (%) -5,6 -6,6 -6,8
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 39,5 8,2 -7,9
Net debt / market cap (%) 11,5 3,3 -3,6
Equity ratio (%) 18,3 21 22,9
Net IB debt adj. / equity (%) 39,5 8,2 -7,9
Current ratio (%) 101,7 109,9 116,1
EBITDA / net interest (%) 7150 49129,9 36374,9
Net IB debt / EBITDA (%) 76,4 15,2 -15,9
Interest cover (%) 3357,5 4600,2 5043,7
SEKm 2019 2020e 2021e
Shares outstanding adj. 9 9 9
Fully diluted shares Adj 9 9 9
EPS 8,75 12,14 13,62
Dividend per share Adj 0 3,6 4,1
EPS Adj 15,33 15,92 17,19
BVPS 57,28 69,42 79,4
BVPS Adj -9,33 3,2 13,25
Net IB debt / share 22,7 5,7 -6,3
Share price 196,81 173,2 173,2
Market cap. (m) 1801 1585 1585
Valuation 2019 2020 2021
P/E 21 14,3 12,7
EV/sales 0,56 0,46 0,41
EV/EBITDA 7 4,8 4,2
EV/EBITA 14,1 9,1 7,7
EV/EBIT 18 11,2 9,2
Dividend yield (%) 0 2,1 2,4
FCF yield (%) 7,3 12,6 15,6
P/BVPS 3,21 2,49 2,18
P/BVPS Adj -19,72 54,05 13,07
P/E Adj 12 10,9 10,1
EV/EBITDA Adj 6,2 4,8 4,2
EV/EBITA Adj 11,4 9,1 7,7
EV/EBIT Adj 13,8 11,2 9,2
EV/cap. employed 1,7 1,3 1,2
Investment ratios 2019 2020 2021
Capex / sales 1,6 2,2 2,2
Capex / depreciation 141,5 131,8 134,4
Capex tangibles / tangible fixed assets 33,4 32 36,7
Capex intangibles / definite intangibles 0 34,6 36
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 23,6 40,2 44,8

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 Mar 2020
Livförsäkringsbolaget Skandia 10.9 % 10.9 % 31 Mar 2020
Länsförsäkringar Fonder 9.0 % 9.0 % 30 Jun 2020
Triton 7.0 % 7.0 % 11 Dec 2019
Skandia Fonder 6.9 % 6.9 % 31 May 2020
Avanza Pension 5.7 % 5.7 % 31 Mar 2020
Unionen 4.0 % 4.0 % 31 Mar 2020
Canaccord Genuity Wealth Management 2.8 % 2.8 % 31 Mar 2020
Fondita Fonder 2.3 % 2.3 % 30 Apr 2020
Öhman Fonder 2.0 % 2.0 % 31 Mar 2020
Source: Holdings by Modular Finance AB

Insider list - Proact

Name Quantity Code Date
Dmitrijs Sarafutdinovs + 340 BUY 10 Jun 2020
Ann-Charlotte Arnshav + 450 BUY 9 Jun 2020
Richardas Pivoriunas + 340 BUY 4 Jun 2020
Richardas Pivoriunas + 340 BUY 4 Jun 2020
Ellen Grasbakken + 340 BUY 3 Jun 2020
Yes + 450 BUY 28 May 2020
Martin Thompson + 450 BUY 14 May 2020
Danny Duggal + 450 BUY 13 May 2020
Jonas Ekman + 450 BUY 13 May 2020
Rene Schuelein + 450 BUY 12 May 2020

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