Proact - Protecting bottom line in a slowing market - ABG

• Sales -1-2% as we estimate neg. organic growth in Q3-Q4e
• Cost reduction programme makes us raise adj. EBITA +0-2%
• Share trading at 7.1x 2023e EV/adj. EBITA

Tough comps ahead should result in negative organic growth
Proact delivered a -2% organic growth in Q2 (ABGSCe 3%) and is entering a period with tougher comps ahead. As such, we stick to our thesis that the company is likely to see further negative organic growth in the rest of 2023e. Investment appetite in IT capex should remain somewhat pressured by a tougher macro environment, although structural trends like data protection and AI should drive demand for complex data storage products and solutions. Proact announced more details from the cost reduction programme; the total cost of SEK 20m was taken fully in Q2 and this should yield savings of SEK 45-50m in 2023e and SEK 60m annually from 2024e. We find this encouraging and supportive for the increasing margin trend beyond 2023e.

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/7c99cfd7e72348dcbc6c934b50fb1096/pdf/protecting-bottom-line-in-a-slowing-market.pdf