Proact - Short-term headwinds
23 juni, 18:30
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We expect weakness in Central and West in coming quartersThe Nordics & Baltic and the UK regions are performing well for Proact, while Central (mainly Germany) and West (Netherlands) are facing challenging markets and weak internal efficiencies. Increased competition from larger players like Bechtle and Cancom, which are also struggling with declining sales and reduced margins, makes the current market tough. Dell and NetApp growth expectations for the coming quarters are also set to fall somewhat. Having met the CEO in May (link), we expect to see actions taken in these regions to focus more on its core: storage and protection of business-critical data. We anticipate continued customer churn (as in Q1) on larger and lower-margin outsourcing contracts, while also reducing employees. We estimate negative organic growth in the coming two quarters and for margins to decline y-o-y, vs our previous expectation that was more flattish y-o-y. For Q2, we now expect organic growth of -5% and an adj. EBITA margin of 6.1% (7.6% last year), for an adj. EBITA of SEK 71m, down 26% y-o-y. We cut adj. EBITA by 8-12% in 2025e-27eAs a result of a weaker near-term sales development, some extra costs for adjusting the organisation (where not all will be taken as non-recurring) and FX headwinds from the stronger SEK, we reduce sales and adj. EBITA in 2025e-27e by 3-4% and 8-12%, respectively. Buybacks and M&A still on the cardsWe expect both acquisitions and buybacks given Proact's net cash position, but we have not included these actions in our estimates. The new CEO Magnus Lönn was successful in raising the Nordic & Baltic margin from 6.5% to >10% over three years, and we expect him to try to replicate that journey across the group. On our new estimates, the share is trading at 8.9 |
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
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Proact - Short-term headwinds
23 juni, 18:30
|
...
We expect weakness in Central and West in coming quartersThe Nordics & Baltic and the UK regions are performing well for Proact, while Central (mainly Germany) and West (Netherlands) are facing challenging markets and weak internal efficiencies. Increased competition from larger players like Bechtle and Cancom, which are also struggling with declining sales and reduced margins, makes the current market tough. Dell and NetApp growth expectations for the coming quarters are also set to fall somewhat. Having met the CEO in May (link), we expect to see actions taken in these regions to focus more on its core: storage and protection of business-critical data. We anticipate continued customer churn (as in Q1) on larger and lower-margin outsourcing contracts, while also reducing employees. We estimate negative organic growth in the coming two quarters and for margins to decline y-o-y, vs our previous expectation that was more flattish y-o-y. For Q2, we now expect organic growth of -5% and an adj. EBITA margin of 6.1% (7.6% last year), for an adj. EBITA of SEK 71m, down 26% y-o-y. We cut adj. EBITA by 8-12% in 2025e-27eAs a result of a weaker near-term sales development, some extra costs for adjusting the organisation (where not all will be taken as non-recurring) and FX headwinds from the stronger SEK, we reduce sales and adj. EBITA in 2025e-27e by 3-4% and 8-12%, respectively. Buybacks and M&A still on the cardsWe expect both acquisitions and buybacks given Proact's net cash position, but we have not included these actions in our estimates. The new CEO Magnus Lönn was successful in raising the Nordic & Baltic margin from 6.5% to >10% over three years, and we expect him to try to replicate that journey across the group. On our new estimates, the share is trading at 8.9 |
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
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