Dustin Group AB (publ)

Good. Thank you very much, operator. And good morning and most welcome, everyone. Both our existing and new and potential new shareholders to our fourth quarter presentation and conference call. Hope you're all well and had a good morning so far. Here on the call is myself, Tomas Ekman, and Johan Carlsson, CFO. So today we present our fourth quarter, also ending our fiscal year for 2021. And this Q4 has been a transformative quarter in many ways. First, we see that our markets and the world is opening up and the corona restrictions that have been in place for the last 18 months is loosened. Secondly, we are experiencing a very strong growth built from an underlying demand, which we have managed well to capture during the quarter. And thirdly, we closed the transaction of Central Point beginning of June. And from this quarter, the shapes of our consolidated group are visible. And I want to also take the opportunity to emphasize that I'm really proud of our achievements on everyone on Dustin Group for their strong contribution in helping and supporting our customers and continuously enable them to stay in the forefront, especially now also when you see the numbers. So moving on then to slide two for the financial highlights to see how we are improving and performing now during the Q4. A really strong 20.5% organic growth, which is really good. And we have strengthened our position in the market and our proactivity and strong position in the value chain benefited our performance in the market, which has been impacted somewhat by component shortages and supply chain disruptions due to the pandemic. But however, we managed that well and in combination with an intensive cost focus, good demand, And the acquisition of Central Point resulted in an adjusted EBITDA increasing to 229 million SEC. The EBITDA margin strengthened to 4.5%. And in addition, our online core business performed strongly in pace with a higher share of online retail and a greater need for mobility, cloud services, and security driven from the underlying strong trends. And those trends, the market trends that we build our strategy on, the online shift, the growth for mobility and cloud services, the demand for predictable IT costs, focus on security and integrity, and last but not least, sustainability. All those have continued during the quarter and during the year, and they are increasing in importance, making our long-term position even stronger. So what is also interesting to see, I think, during this quarter is that our customers in SMB, they have increased their average order value with around 15%, auto-driven by price, And that they've also increased their frequency, i.e. how often they buy from us with 11% versus last year. So it is really high activity among our customers, which is really encouraging to see. Total net sales were 5.1 billion SEK, up with 77.6% versus last year. And as I said, the organic growth was up to 20.5%, of which SMB showed a very positive 17.9%. And LCP really coming back at the plus 23.7% and B2C at 7.9%. So overall strong organic growth, which shows not only good underlying demand, but also our capability to make use of it and deliver. Gross profit was 758 million SEK compared to last year's 434 million SEK. That gave us a gross margin of 14.8%. Somewhat down from last year's 15.1% because of us adding more LCP volume from central point. Our adjusted EBITDA increased a lot and came in at 229 million SEK versus last year 101 million SEK. And I said that gave us an adjusted EBITDA margin at 4.5% for the quarter versus last year's 3.5%. So very strong performance and strong earnings. The margin also improved by good performance and the structural changes we're doing combined with the good cost control with all segments. And both SMB and S&P show good progress in the margin uptake. Consequently, EBIT was up to 154 million SEK compared to last year's 84.5 million SEK. And items affecting comparability was minus 37.9 million SEK. And EPS at 0.65 versus last year's 0.75. And our leverage at the end of the quarter was 3.4 versus 2.6 last year as a consequence of the acquisition of CentralPoint. And the cash flow, strong cash flow from operating activities at 201 million SEK compared to last year's 110. So apart from an intense quarter in general from an operational perspective, we completed and consolidated the acquisition of Central Point in the Benelux on June 3rd. And as you know, we also made a rights issue which was fully subscribed at approximately 1.2 billion SEK. And with the strong results and with the cash, we or the board proposes a dividend at 2.21 SEK per share. Good, Johan, you can take us in deeper detail in the segment.

Yes, let's move to slide three then and the S&D segment for some more details. Let's say sales for the quarter ended at 1,713,000,000, an increase of 36.7% over last year. and that represented an organic growth of 17.9%. This growth continues to be strong despite challenges in the global supply chains. As in Q2 and Q3, we continue to see good sales development in the hardware categories from all customer groups in the segment. The acquisition of Central Point in the Netherlands affected the sales numbers in the quarter by 236 million, and sales there were in line with expectations. Consulting and project-related sales continues to be affected by the pandemic. However, we saw strong sales growth in the entities that were integrated during full year 19-20, and recurring sales in the integrated units grew by 19% compared to Q4 last year. Geographically, sales development was strongest in Norway and Finland. We look at segment margin for the quarter. It reached 9.8% compared to last year's 8.3%. The main reasons for the good margins were high volume growth with with the shortage in the market and our ability to capture margin from that shortage, the acquisition of Central Point, strong sales of private label products, and effects from cost efficiency initiatives earlier this year and last year. This was, as in previous quarters, somewhat offset by the lower sales of high margin project-related services. If you look at software and services sales, amounted to 389 million in the quarter compared to last year's 337 million, which was an increase of 15.2%. The share, however, of software and services was 22.5% down from 26.7% last year, mainly due to the strong hardware sales in the Nordics and the acquisition of Central Point. In total, Segment result ended at 170.1 million compared to last year's 105 million, or an increase of 62%. Yet another strong quarter from SMB, both in regards to sales and margins. We then move to LCP and slide four. Sales in LCP was 3,240,000,000 in the quarter, an increase of 118%, of which 23.7 was organic. During the quarter, we saw a very strong sales increase in public sector, both in demand from customers, but also in deliveries. Sales to corporate customers continue to be strong and is to a lesser extent affected by the shortage situation in the market. Central Point added to the sales by approximately 1.4 billion, and sales from Central Point were in line with plans, but as in the Nordics, affected by the turbulence in the global supply chains. Geographically, we saw strong sales in Finland and Sweden, while larger contracts in Denmark was affected negatively, and hence growth was lower in Denmark. Segment margin ended at 7.1% compared to last year's 6.1%. The increase over last year is mainly explained by the generally improved margins in some of the larger contracts, cost benefits coming from larger volumes, and the effects from last year's cost efficiency activities. margins in the Benelux was in line with the ones in the Nordics. Segment results improved from last year's 90.4 million to 230 million, or by 154%. All in all, a very strong performance in LCP, both from the Nordic and the Benelux region. Moving then to slide five and B2C. B2C continues to perform well and reported a sales increase of 7.6% from 125 to 135 million. Of the growth, 7.9% was organic. The main reason for the sales increase was strong underlying demand for basic hardware such as mobile phones and computers. The segment margin was up from 5.5% last year to 8.5% this year. The high margin situation generated by our good performance in purchasing in a market characterized by shortage continues. That together with good cost development contributes to high margins. Then moving on to slide six, networking capital. Networking capital was negative 256 million compared to last year's negative 422 million. Last year was highly affected by the actions taken as a consequence of the pandemic, where focus was on securing working capital to mitigate potential risk in accounts receivables. Further to that, the inclusion of Central Point has affected the individual items in working capital significantly. We then look at the details. We can see that inventory in the quarter ended at 1 billion 16 million compared to last year's 493 million. The main reason for the increase was the inclusion of Central Point, adding 400 million, and the higher purchase volume to reduce the risk from shortage of components. Accounts receivables were up 1,199,000,000, mainly as a result of Central Point, adding 735 million, but also higher business volume in general and more sales during the end of the quarter added to the total balance. Moving on to accounts payables, which was 1,604,000,000 higher than last year. Again, mainly affected by central point adding 1,128,000,000, but also supplier mix and higher business volume added to the total balance. In total, we continue to see strong performance in the area of working capital, where we continue to stay in or below our target range of negative 100 to negative 200 million. Looking at leverage, as Thomas said before, then the net was 3.4 if we include the pro forma numbers from Centrepoint. And as you remember, our target is to stay between two and three. The main effect on the leverage in the quarter was obviously the acquisition of Centrepoint. So then look at cash flow and investments on slide seven. You can see that the cash flow for the quarter was 130 million in total. Last year was negative 38. And if we look at parts cash flow from operating activities before changing net working capital was 201 million compared to 110 last year. While the change in net working capital was negative 423 compared to negative 90 last year. The main difference being the inclusion of central point and higher inventory levels due to the turbulence in the market. Cash flow from investing activities was 3 billion 72 compared to 19 negative last year, where the acquisition of Centrepoint affected the numbers. Cash flow from financing activities was positive 3 billion 424 compared to negative 39 last year. Main difference being the loans raised for the acquisition of Centrepoint and the rights issue. Moving to investment, total investment amounting to 54 million compared to last year's 31 million. CapEx related to IT development was at 15 million. Nine million was the number for last year. And if we look at the increase, six million came from that report. And investment intangible and intangible assets increased from to 24 million from seven last year. where Centerpoint added 7 million, and our new circularity center in Växjö added 4 million. Investment in assets related to service delivery was slightly lower than last year at 15 million. All in all, 30 million out of the 54 million in capex was affecting cash flow. The others were changing lease or rent contracts. With that, moving back to Thomas.

Thank you, Johan. And then continuing to slide eight. And I just want to show what we are now entering, since we now include also central point numbers in our own numbers. We are also entering a new chapter where DUSPIN is what I would call a textbook example of how companies actually can develop under different management and different ownerships. Where we first had our founders phase, we started in 1984. And then from that 1995, we started to develop an online platform. The company was acquired by private equity company Altdorp back in 2006. And then the Nordic expansion started with entering new markets, build out the IT systems, warehouses and so. And then the IPO in 2015, where we have since then professionalized ourselves, put the clear strategy on services, as well as continuing expanding to new territories and new markets and offering. And now, with the acquisition of Central Point, we clearly put our strong foothold in mainland Europe and build a strong platform for further expansion. So it's a really interesting and transformative year behind us, but this also shows the possibility of our robust business model. Moving on to slide number nine. To show this transformative acquisition, we pave our way in creating the European IT powerhouse, where we now add all the capabilities from Central Point with the 700 co-workers, 7.4 billion SEC in sales and 330 million in adjusted EBITDA and around 50,000 customers. Combining Dustin in the Nordics with Central Point, It's up on slide number 10, the combined entity, which then consists of around 2,400 co-workers, 21.7 billion SEC in revenue performance, as well as a billion in VITA performance and around half a million customers. And this puts us also at number eight on the largest EMEA IT partner retailers. And as you know, being large in our industry, it's a good thing. in terms of purchasing power influence of the whole value chain drive the market and driving both sustainability and profit through our scale so this is a new company with two strong regions where we set out for for further expansions in the markets and further out um moving on then to to slide number 11 we have an and and to see how we will build this we have an attractive value creation agenda to speed up the ability to achieve our long-term targets um where we keep the strong momentum in the core LCP segments in the Benelux, of course, and we realize sales and efficiency opportunities of about 150 million SEK annually on both local and group level. We will also accelerate the growth both in Nordics and Benelux through our targeted capability transfers in both SMB and LCP. We see big opportunities for SMB rollout also in the Benelux region, of course, and we will continue the rollup expansion in Benelux based on our proven Nordic recipe. And synergies are expected in areas such as procurement, private label, IT platform and functionalities, as well as knowledge sharing, of course. We also estimate that they invest approximately 50 million SEK in the coming year here to extract the synergies and that we will reach them in full by 2023-2024. And continuing on the value creation, over to slide number 12. We work on our 2030 commitments that we have showed you before, which we create value both for us, for our customers, and for our society. And just some highlights of our achievements this year is a reduction of 36% in CO2 in the comparable scopes, including the one and two and three of the scopes. We have reached the circularity level of the business at 18.3% now of our reported net sales in 2021, during last year. And we have also conducted the planned 10 activities we had for social equality in the whole value chain, such as working conditions in the factories, doing the audits in the factories, secure the gender pay gap closure that exists in the world. And this has been very good progress all over the year. And you can, of course, read more about our whole work in this in our annual report that will be published very soon. And then moving on to slide 13. 18 months later, after the pandemic or post-pandemic, we can see that the markets are opening up after we've been through the pandemic. It's not over, definitely not, but we have learned to cope with it, at least in some parts of the world. The pandemic is, as we all know, it is a human tragedy, but it has also taught us a new way of working. This was already in the cards also before Corona, but it has clarified the need of efficient and secure digital tools and digital way of working. And for us, it has meant that our position is clearly strengthened and that our business model is very robust, both before, during and after a pandemic. And the trends that we have seen that I mentioned before, they have accelerated with distinct changes in customer behavior. There is an increased IT service demand arising among SMBs and LCPs, especially larger SMBs. And there is an increased demand for instant availability online, as well as security, mobility and remote management. And we have, of course, an extensive experience in this and knowledge and can serve our customers in all our markets. All this shows our robust business model and our ability to ensure good access to products and services, which in the other end enables us to continue on a strong margin development. So in short, you can say that we are very well positioned for what is happening. And before going into Q&A, let's summarize the fiscal year of 2021 on slide 14. Net sales grew with 20.3% to 15.8 billion SEK, where organic growth for the group was 9.6%, with SMB at a strong 11.6%, SAP at a really good 8%, and B2C at a strong 8.8%. Gross margin ended at 15.6% versus 15.5% last year, or the year before, up due to our dynamic pricing model, together with higher volumes and strong sale of private label products, somewhat offset by change customer mix with the acquisition of CentralPoint. Adjusted EBITDA came in at a good 759 million SEC, giving us an EBITDA margin for the year at 4.8%, an increase from last year's 3.9%. The initiatives, all the actions we have taken on the cost side, both the strategic and short term, has given effect as well as our, of course, strong performance and volumes during the quarter. EBIT at 576 million SEC compared to last year's 387 million SEC and an EPS at 3.82 versus last year's 304. And on balance sheet, as Johan mentioned, operating cash flow came in at 740 million SEC and leverage ended for the quarter at 3.4 to EBITDA. So with the solid and good organic growth and strong earnings in Q4, as well as for the full year, we see that we are correctly positioned with a strong and unique digital relationship with hundreds of thousands of customers and even more optimized e-commerce platform combined with strong relations Salesforce towards large corporates and public entities. Even more now enhanced with the acquisition of CentralPoint. And with our service offerings coming back in demand, we further increase our relevance to the benefits of our customers. And that combined, I should say, with our strong financial position means that we are very well equipped to face the opportunities and challenges presented by the business climate and, of course, our customers. Good. I think that was that, and we are happy to take any questions you might have. Operator?