Proact IT Group
Proact - ABGSC Investor Days feedback (ABG Sundal Collier)
2019-12-04 10:50
CEO Jonas Hasselberg presented the company today
Reaffirms 10% growth target (5% organic and 5% M&A)
Three pillars to drive EBITA margin from 5% to 8%
Market outlook remains favourableCEO Jonas Hasselberg today presented Proact at ABGSC Investor Days, highlighting that the company, which have been around for 25 years this year, is progressing well with its large client base. By offering IT infrastructure and data storage products, solutions and services, Proact increases its grade of importance for clients, as IT becomes a more and more integral part of operations. The market trends are in Proact’s favour, with 58% of the market seeing IT as a business enabler vs 42% seeing IT as a cost centre. Proact has exposure in the Nordics, UK, Germany, Netherlands and Belgium, and see a favourable market environment in all geographies, even though it has seen a bit more uncertainties in the UK lately (Brexit related) and some internal headwinds in Germany and Netherlands in the past two quarters.
Lower market growth does not mean slower sales growth
We have seen signs from listed IT services and IT resellers of a slowing market for IT investments in the Nordics lately. However, Jonas emphasised that this is nothing they have seen so far, and we believe Proact is more exposed to the day to day activities to get the IT infrastructure running, rather than new projects. The data centres, servers and data storage, all need to work even if the appetite for IT investments (products and services) is growing at a slower pace. Proact has a growth target of 10% per year, driven by a rather equal mix of organic growth and acquisitions, according to Jonas.
Margin drivers aim to increase profitability significantly
Proact has an EBITA margin target of 8% (vs R12m level of 5.2%), which will be driven by: 1) higher share of services sales, 2) more focus on internal profitability and enabling operational leverage across the group, and 3) acquisitions with a higher share of services than Proact has t
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