Proact: Cost miss in Q1 - ABG

Sales remain at a stable level, but we are cautious for H2
Cost inflation hurt Q1 margin, cost program yet to be announced
Adj. EBITA -1-6%, share at 7.9x '23e EV/adj. EBITA


Good top-line but worse margin in Q1

Proact delivered a solid top-line in Q1, with sales coming in roughly in-line with expectations and with an 8% organic growth, driven by both System sales (10%) and Service sales (6%). However, despite an increasing gross margin of 21.7% (20.9%), costs surprised negatively causing an EBITA miss vs FactSet consensus of -22%. Proact communicated a solid demand and that it has not seen a dramatic change in customer behaviour due to the macro situation, which we find positive, but we still see risks on decelerating growth rates ahead, both from a weaker market and tougher comps. Looking at outlook and estimates on third-party hardware suppliers NetApp and Dell, expectations are for weaker growth ahead, while price increases may support cloud revenues.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/proact/Equity-research/2023/5/proact---cost-miss-in-q1/