Dustin Group AB (publ) (DUST) Earnings Call Transcript & Summary

Hello, and welcome to the Dustin Group Audiocast with Teleconference Q4 2020/2021. [Operator Instructions] Just to remind you, this conference call is being recorded. Today, I am pleased to present CEO, Thomas Ekman; and CFO, Johan Karlsson. Please begin your meeting.

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, as said, on the call is myself, Thomas Ekman; and Johan Karlsson, 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 has been in place for the last 18 months is loosen. 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 Centralpoint 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 2 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 productivity 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 Centralpoint resulted in an adjusted EBITA increasing to SEK 229 million, and the EBITA 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%, partly 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 SEK 5.1 billion, up with 77.6% versus last year. And as said, the organic growth was up to 20.5%, of which SMB showed a very positive 17.9%; and LCP really coming back at a plus 23.7%; and B2C at 7.9%. So overall, strong organic growth, which shows not only a good underlying demand, but also our capability to make use of it and deliver. Gross profit was SEK 758 million compared to last year's SEK 434 million. 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 Centralpoint. Our adjusted EBITA increased a lot and came in at SEK 229 million versus last year's SEK 101 million. And as said, that gave us an adjusted EBITA margin at 4.5% for the quarter versus last year's 3.5%. So very strong performance and strong earnings. The margin -- also good to mention that the margin also improved by good performance and the structural changes we are doing, combined with good cost control with all segments. And both SMB and LCP showed good progress in the margin uptake. Consequently, EBIT was up to SEK 154 million compared to last year's SEK 84.5 million. And items affecting comparability was minus SEK 37.9 million. And EPS at SEK 0.65 versus last year's SEK 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 SEK 201 million compared to last year's SEK 110 million. So apart from an intense quarter in general, from an operational perspective, we completed and consolidated the acquisition of Centralpoint in the Benelux on June 3. And as you know, we also made a rights issue, which was fully subscribed and at approximately SEK 1.2 billion. And with the strong results and with the cash, we -- or the Board proposes a dividend at SEK 2.21 per share. Good. Johan, you can take us in deeper deep dive in the segments.

Yes. Let's move to Slide 3 then on the SMB segment for some more details. Net sales for the quarter ended at SEK 1.730 billion, an increase of 36.7% over last year. That represented an organic growth of 17.9%. Sales growth continues to be strong despite challenges in the global supply chain. 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 Centralpoint in the Netherlands affected the sales numbers in the quarter by SEK 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. If 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 the shortage in the market and our ability to capture margin from that shortage, the acquisition of Centralpoint, strong sales of private label products and effects from cost efficiency initiatives earlier this year and last year. This was in -- this was, as in previous quarters, somewhat offset by the lower sales of high-margin, project-related services. If we look at software and services sales, that amounted to SEK 389 million in the quarter compared to last year's SEK 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 and -- in the Nordics and the acquisition of Centralpoint. In total, segment result ended at SEK 170.1 million compared to last year's SEK 105 million or an increase of 62%, yet another strong quarter from SMB, both in regards to sales and margins. If we then move to LCP and Slide 4. Sales in LCP was SEK 3.240 billion 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 continued to be strong and is, to a lesser extent, affected by the shortage situation in the market. Centralpoint added to the sales by approximately SEK 1.4 billion, and sales from Centralpoint were in line with plan but, as in the Nordics, affected by the turbulence in the global supply chain. 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 result improved from last year's SEK 90.4 million to SEK 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 5 and B2C. B2C continues to perform well and reported a sales increase of 7.6% from SEK 125 million to SEK 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 6 and net working capital. Net working capital was negative SEK 256 million compared to last year's negative SEK 422 million. Last year, it 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 receivable. Further to that, the inclusion of Centralpoint has affected the individual items in working capital significantly. If we then look at the details, we can see that inventory in the quarter ended at SEK 1.016 billion compared to last year's SEK 483 million. The main reason for the increase was the inclusion of Centralpoint adding SEK 400 million and the higher purchase volume to reduce the risk from shortage of components. Accounts receivables were up SEK 1.199 billion, mainly as a result of Centralpoint adding SEK 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 SEK 1.604 billion higher than last year, again, mainly affected by Centralpoint adding SEK 1.128 billion. 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 SEK 100 million to negative SEK 200 million. Looking at leverage, as Thomas said before, then the net was 3.4 if we include the pro forma numbers from Centralpoint. And as you remember, our target is to stay between 2 and 3. The main effect on the leverage in the quarter was obviously the acquisition of Centralpoint. So then look at cash flow and investments on Slide 7. You can see that the cash flow for the quarter was SEK 130 million in total. Last year, it was negative SEK 38 million. And if we look at the parts, cash flow from operating activities before change in net working capital was SEK 201 million compared to SEK 110 million last year. While the change in net working capital was negative SEK 423 million compared to negative SEK 90 million last year, the main difference being the inclusion of Centralpoint and higher inventory levels due to the turbulence in the market. Cash flow from investing activities was SEK 3.072 billion compared to SEK 19 million negative last year, where the acquisition of Centralpoint affected the numbers. Cash flow from financing activities was positive SEK 3.424 billion compared to negative SEK 39 million last year, main difference being the loans raised for the acquisition of Centralpoint and the rights issue. Moving to investments. Total investments amounting to SEK 54 million compared to last year's SEK 31 million. CapEx related to IT development was at SEK 15 million. SEK 9 million (sic) [ SEK 6.1 million ] was the number for last year. And if we look at the increase, SEK 6 million came from Centralpoint. And investments in tangible and intangible assets increased from -- to SEK 24 million from SEK 7 million last year, where Centralpoint added SEK 7 million, and our new circularity center [indiscernible] added SEK 4 million. Investments in assets related to service delivery was slightly lower than last year at SEK 15 million. All in all, SEK 30 million out of the SEK 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 8, and I just want to show what we are now entering since we now include also Centralpoint numbers in our own numbers. And we are also entering a new chapter where Dustin is what I would call a textbook example of how a company actually can develop under different management and different ownerships, where we first had our founders phase with -- started in 1984. And then from that, 1995 developed -- starting to develop an online platform. The company was acquired by a private equity company, Altor, back in 2006. And then the Nordic expansion started with entering new markets, build-out of IT systems, warehouses and so. And then the IPO in 2015, where we have since then professionalized ourselves, put a clear strategy on services as well as continue in expanding to new territories and new markets and offerings. And now when -- with the acquisition of Centralpoint, we clearly put our strong foothold in Mainland Europe with -- 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 #9. This -- to show this transformative acquisition, we paved our way in creating this European IT powerhouse where we now add all the capabilities from Centralpoint with 700 coworkers, SEK 7.4 billion in sales and SEK 330 million in adjusted EBITA and around 50,000 customers. And combining the Dustin in the Nordics with Centralpoint gives us on Slide #10 the combined entity, which then consists of around 2,400 coworkers, SEK 21.7 billion in revenue pro forma as well as SEK 1 billion in EBITA pro forma and around 0.5 million customers. And this puts us also as the #8 on the largest EMEA IT partner resellers. And as you know, being large in our industry is 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 2 strong regions where we set out for further expansions in the markets and further out. Moving on then to Slide #11. We have -- 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, where we keep the strong momentum in the core LCP segments in the Benelux, of course, and we realized sales and efficiency synergies of about SEK 150 million annually on both local and group level. We will also accelerate the growth both in the 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 roll-up 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 we invest -- to invest approximately SEK 50 million in the coming year here to extract the synergies and that we will reach them in full by '23/'24. And continuing on the value creation over to Slide #12. We work on our 2030 commitments that we have showed you before, which will 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 1 and 2 and 3 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, secured 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. Now 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. I see it 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 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 hand 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 SEK 15.8 billion, where organic growth for the group was 9.6%, with SMB at a strong 11.6%; LCP 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 changed customer mix with the acquisition of Centralpoint. Adjusted EBITA came in at a good SEK 759 million, giving us an EBITA margin for the year at 4.8%, an increase from last year's 3.9%. The initiatives or 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 SEK 576 million compared to last year's SEK 387 million and an EPS at SEK 3.82 versus last year's SEK 3.04. And on balance sheet, as Johan mentioned, operating cash flow came in at SEK 714 million, and leverage ended for the quarter at 3.4 to EBITDA. So with a solid and good organic growth and strong earnings in Q4 as well as for the full year, we see that we are, as said, correctly positioned with a strong and unique digital relationship with hundreds of thousands of customers and even more optimized e-commerce platform combined with a strong relations sales force 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 increased our relevance to the benefit 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 now. Operator?

[Operator Instructions] The first question comes from Daniel Thorsson from ABG.

Yes. I start off with a question on potential price increases here. So how much did increased prices drive the organic growth versus volume in this quarter? I guess, the contribution from you being able to have a dynamic pricing model and using the component shortages for competitors in a favorable way for you. And how -- for how long time do you think that will be sustainable?

Well, as you know, our pricing is very intense in terms of, let's say, how we do pricing. So there is -- it's a very tough thing to talk about price increase from our side. What we have seen is that the prices of -- our purchase prices are going up, but we are able to, let's say, adjust our own prices in accordance with that and even improve that a little bit, meaning we have higher margins on hardware in this quarter compared to, let's say, a more stable quarter where prices are, yes, developing in a more stable way. So I would say that the price increases we have seen coming from suppliers, we have been able to transfer to our customers in the same way as before or even slightly better.

Yes. Exactly. I understand that. Could we quantify that? I mean, are we talking about 1%, 2%? Or is it 5%, 6% or up to 10%? Or -- because it was certainly a strong organic growth right now, and I guess, that has partly to do with prices, not you improving prices but the whole value chain, obviously.

There are a couple of percentage price increase in that, but we don't really follow it in that way. So it's hard to give you a number, but it's a couple of percent, for sure.

Yes, absolutely, that's fine. And then the second question on inventory. I may have missed the details there or the comments, but should we see the buildup in inventory right now as a sign that you expect to see strong deliveries in the next few quarters as well? I mean, you are still delivering lots of products in this quarter growing fast. And despite that, you are building up inventory on a net basis. And will you be able to deliver to customers? Is that how we should be...

Yes. I think you should see it as we are building up stock because, from a seasonality perspective, the quarters coming is stronger than the quarter we had just had. So it's a natural thing that we build up stock at the moment. And we are building up stock in order to achieve the same thing as we achieved in Q4. So no change actually in our way of working. But it's a security to continue to operate the way we have done it in the last 2 quarters.

Okay. Okay. I see. And then the final question on product specifics related to the component shortages we have in the market, which products are most scarce at the moment for customers? And has that potential mix effect from your product mix affected your margin, either positive or negative?

The products in -- the most difficult to get are the ones that are built to a specific specification through a specific customer because the -- as there is a shortage and production problems, they are -- the manufacturers are running longer production runs with more, let's say, normal or general products and not customer-specific. So it's really hard to get customer specifics into the factory, that's why.

Okay. But can you say if it's like computers, laptops, screens, something like that, that could change your mix, which is driving margin either up or downwards?

The most sold products we do is, of course, laptops. And so that affects us. That, it does. But it has been shortages in all kinds of supplies, also the more non-specific like WiFi connectors and so forth. But we see that, that is being coped with in a better way now going forward, which is good, of course. So -- but it's back to what Johan said, there is -- for us, it's more to secure that when we have large orders of, for example, 10,000 laptops, then that can be harder to get the exact specification. But there are products available if you just have the purchasing power to get them.

The next question comes from the line of Fredrik Stenkil from Nordea.

Yes. Congrats to a good quarter. I have a question on Centralpoint. From the prospectus, it looks to have grown even faster than the 12% organic rate you presented at the announcement. So could you comment a bit on what's been driving that and also, if you see a risk for sort of normalization in the year ahead with regards to hardware sales? And also, how that would balance better margins in the project-based sales potentially coming back now?

I think overall, Centralpoint has had a good spring and also good summer. So that has been good. And you're always cautious when you sort of think about when you do a large acquisition like this, how the sort of historical growth has been. But we see the same patterns that we see in the Nordics for Benelux with Centralpoint there. So it's the same drive in high demand. And as you saw, the -- our LCP organic growth of 23.7% was, of course, strong and due to the underlying demand in the market. And so there is a strong demand and the same, as said, the same pattern we see in Benelux, as we've seen in the Nordics. So it has been improved since the prospectus, yes. And on to the second question, how that will materialize. I mean, still, we -- I mean, there is underlying demand in the market, and let's see how that continues. But that's also back to what Johan mentioned there that we are building up so we can deliver also to the larger entities and as well as the SMBs, of course, now during the quarter. And then you also had a question on the project-related -- or services, right, Fredrik, yes. And I think that, we see. I mean, the more people are coming back to offices, the more sort of the offices are opening up or the countries are opening up. There is also an increased demand for services. And that, of course, can benefit us now when we have also built a stronger platform for services, and we also are able to deliver it, not only in the Nordics, but also in the Benelux region. In Benelux and what Centralpoint brings into the table is, of course, a very strong position within what we call volume services, where they do a lot of customer-specific services for larger corporates as well as larger SMBs. And that is also something that we are building up also in the Nordics in the same way. So yes, it has been a good period for both in the Nordic and the Benelux.

The next question comes from the line of Mikael Laséen from Carnegie.

Yes. I've got a question on Centralpoint, and if you can comment how the integration is developing. And the SEK 38 million in items affecting comparability, what have you achieved with these costs?

I think integration, if we take that first, to start off. I mean, we have set out a plan for the integration for the next, let's say, very intensive for the next 12 to 15 months. And the integration is basically working in 2 directions. One is the cost synergies, and the other one are on the revenue side. So -- and the first step there is that we have created a totally, let's say, global leadership team that are able to drive the implementation of the synergies in the various regions and the various business units. And then that's been done during this quarter, and we are in the process of putting detailed plans together for each of these value streams that -- where we are expecting to capture synergies. That work has, I think, shown that the assumptions that we did as part of the acquisition is still realistic, and we still have the potential to reach the numbers that we've said before. So that's the status at the moment. And your second question, Mikael, was?

Yes. Well, it was the items affecting comparability, SEK 38 million.

Yes. I mean, part of it was the acquisition cost, of course, direct acquisition costs. So there, actually, we got the company. So that's good. And then we have put some integration costs in items affecting comparability where you should see them as part of the work we're doing to put the old acquisition, Vincere, together as one unit in order to then put them together with Centralpoint, so we get to one entity in the Benelux. So what we are doing now is actually, as of this week, we are moving into one brand for the Vincere Groep under the brand name of Dustin in the Netherlands, which is a great achievement from the team down there. So that will have a super impact on our ability to drive the services and online business in primarily SMB then in the Netherlands. So I think we have -- and that achieved a lot by this step.

Okay. Interesting. And going forward then, in the coming quarters, how will you take the rest of the integration costs? I think you expected to have around SEK 50 million.

Yes. And I think we've said that since the integration cost primarily would come with reducing the number of people and reducing the number of sites, we believe that the majority of the cost will come in this fiscal year, so until the end of August. And there, we will also have initiated, let's say, the cost associated to that -- the cost reduction associated to that cost at the end of this financial year. So I think that's the plan we have at the moment.

Okay. Okay. Got it. And just another one on Centralpoint on the supply chain situation. I mean, obviously, demand is strong there, but did you see any negative effect that we couldn't deliver really in line with demand? So how much was the negative effect?

We have a very similar situation in the Benelux. It's -- you would say that this is not so much to do with the regional question. It's more on a manufacturer by manufacturer. So the different brands, they are in different situations. So at certain stages, Dell is more difficult than HP, and the other month, it's the other way around. So it depends a little bit. And that they treat everyone more or less -- we have the same situation in the Benelux with the same suppliers. So I would say, a very similar situation.

Okay. Yes. Fair enough. And my final one, if I may, it's on the software and services part of your business, how the so-called service factory is performing and your work there? And also the data center integration projects, if you can update us on that, please?

Yes. I think -- I mean, if you take the service factory, as we said, actually, the -- our -- remember, our intention to integrate the companies that we did in order to create the factory and the base for services going forward, that was a bit interrupted from the pandemic. But before that, we actually integrated all but 5 of the acquisitions, and we can now see that the development in these integrated entities are performing very, very well and actually growing by almost 20% in the quarter when it comes to recurring sales. So you must say that the development of our standardized service portfolio sold by our own sales reps is performing very well. So I think that has been a great success throughout this quarter. Now we still have 5 entities not integrated, where we are now reinitiating that work in the Nordics to put them into the same, let's say, environment as we have for the other integrated companies and hence, hoping that, that will give us a better sales development in these entities. So that's the work we're doing at the moment. But I think we can say that both from a, let's say, a standardization perspective, where we have now a portfolio of highly standardized services for small and medium-sized businesses and from a sales efficiency perspective, where we now have a combination of relation sales and online sales, it's working very well.

And on the data center part?

The data center is done, so in the Nordics. So we are now -- with the data centers that we, let's say, said we would achieve, obviously, this is kind of a continuous work, unfortunately, because as we are integrating new companies, basically, all the acquisitions that we made come with the data center. So we need to continue this, but of course, on a lower scale because if we integrate one company, then there will be one data center to move into the base that we now have in the Nordics. So it's a much easier work, of course.

The last question comes from Erik Elander from Handelsbanken.

All right, and congratulations to a fantastic quarter. It was really impressive. Great stuff. So first of all, I was just wondering, when I look back at the historical numbers of organic growth for Dustin, like every other year, it has been strong, and every other year, it has been somewhat not so-so, like 2% or something like that. So now when you have almost 10% in this year, should we expect this trend to continue, meaning that next year is going to be around 2%? And also, what is the reason behind this every other year volatility?

I think you can say -- I mean, first of all, it's also that we are all in this call -- everyone in this call is as good as to project the future. But we, of course, see that what we have behind us with -- or behind us, we are [indiscernible] might say for the pandemic. That has proven to be a very strong shift in how people work. And that, of course, we can foresee will continue. And the changes in working environment will, of course, also affect the digital way of working and which, of course, benefits us. So I should say it's -- we still foresee a strong demand. We still foresee good opportunities for growth and for us to grabbing that growth. And to answer your question on the volatility, it has been -- also been very much affected of how we have dealt with the public side primarily, which has been a bit volatile during the last years. But now where we have sort of added up and built a stronger portfolio in the large corporate and public segment, especially in the public segment, where, as you know, our really strong position in SMB has created a good portfolio of a lot of customers that sort of mitigate the volatility. And the same is now happening for us in the public side, where we grow a lot and have a wider portfolio of -- and also with the acquisition of Centralpoint. We have broaden our portfolio, which then can mitigate the volatility in the growth numbers. So -- but that is the reason for it, if you look back on the historical numbers. So we see that we have strengthened our position. Yes. Sorry.

Yes, you're actually catching up on the big Norwegian guys.

Yes. I don't know who you're talking about, no.

No, me neither. All right. Perfect. So I was also like interested in -- like in 2019, before the pandemic, the hardware market was quite weak in the Nordic region, and you also, as the other players in this sector, suffered from that. Then became the pandemic and also the remote work purchases and stuff like that. Now the market is really, really strong once again post the pandemic and post all the remote work purchases. What has changed from 2019 to now?

I think overall, it's a level up of how people work and what kind of tools and what they use. I mean, what -- the more you use the digital tools for working, the better components you need, the better equipment you need, the better tools you have, the more productive you will be. And we see that the same sort of things are happening in your different workplaces. People upgrade their home office in the same pace they upgrade their sort of office equipment in the offices. Because you want to be -- you work so much digital now, so you need good equipment, and you need good networks. You need good routers. You need good screens. We see now that people buy larger screens. Last year, the average screen sold was the 27-inch. Now it's the 33. So people are increasing in their -- or they're buying better equipment and better cameras and better keyboards and better hardware that's with more memory, more program -- better, stronger processors and so forth. And that can -- that, we see can continue.

I think also, you would see a trend towards the fact that if your home office used to be kind of a B2C customer buying that, nowadays, there are much more B2B customers equipping their employees' home office. So there is an enlargement of the B2B market, obviously, where we are stronger, so we can capture that trend and equipping home offices from a B2B perspective. That's good for us.

And that's been a strong trend among our customers to do that. So that's where we do both home and office equipment for them.

Interesting. So actually, like the pandemic triggered remote work purchase boost that we see is actually continuing right now and will do for maybe 1, 2 years. Or what do you expect about that?

I mean, I think we will have a situation now which the very well-known word hybrid is -- or famous word right now. But it will continue because this also has shown. I mean, the tools that we actually have had for 10 years, with the camera in the PC and the camera on the phone, and we have a Skype and Teams and so forth, but we haven't used it on a broader scale. And that people do now. Everyone knows how to use Teams. Everyone knows how to share a PowerPoint presentation and so forth. And that was -- that demanded a lot of change programs and stuff before. But now people are just diving into it and use it. And that, of course, creates the demand for better products, as said, better products, better cameras when you want to level up. And I think that is an important factor here that this will -- as we see this, it will continue.

Okay. Cool. And my last question, actually. So we talked about the big Norwegian guys that you can't mention here because that's like swearing in the church. And then we have the big German guys, which I also can't mention here, but they start with a B. And you have now entered like, yes, some years ago entered into the Netherlands and the Benelux region, which is very similar as I see in terms of IT development overall. What will be the next interesting markets for you now that you say that you're going to expand into a broader European area? Because these other companies have big market positions, and they have not entered into the Nordics because you have such a strong position and other companies as well. How can you compete with those? And what countries would be of interest for you?

I think overall, if you look back, then you can say that we have been expanding to new territories every third or fourth year, if you look historically. And that's about the time it takes for us to prove ourselves in the markets we are. And -- but I think, overall, you can say what we find really exciting is that our SMB model with the online efficient -- cost-efficient sales model with things on the shelves, products on the shelves, that is really attractive also for the wider European market because it's not so common. Most IT companies and most of our competitors come from a service part. They come from the sort of service consultancy, and then they have moved into hardware somewhere, but they are not at all in the same level of delivering a push model as we have in the Nordics. But we've also seen that we -- in order to gain that position, we need the hardware. We need a scale in hardware, hence, our acquisition of Centralpoint because with that, then you can get these large volumes, and then you can really start to build up a strong SMB position, where you can find more attractive margins, you can find more attractive and more sort of standardized offerings, which suits us very well. So I think in general, you can say that these -- there are openings in the markets -- in different markets like Germany, France and so forth. It is. But then we might not need to take the full of Germany or full of France. You can take areas of Germany, for example. Germany is a massive market. So if we go into this slot, we can probably find a good business just in this slot. So we'll see where we end up. But we, of course, see this as -- the stronghold we're now building in Benelux will, for sure, serve for further expansion in the future.

So this is interesting. Would you say -- not to -- try to not make this as biased as possible. Would you say that Dustin is the next-generation IT infrastructure delivery model?

Yes, I would say definitely, even though I'm not biased, no. But of course, no, but we see that we have a strong position. But I think it's built -- you should also make it back to the underlying trends, which is very strong on the online position, the drive for security mobility, the drive for predictable IT costs. You don't want to have an IT department in the company anymore, which is dark and costs a lot of money. You want to have visibility. You want to know what it costs, and you want to -- you understand that IT is not -- no longer someone else's issue in a company. It's your issue as running the company. It's the heart of the business. And of course, that suits us, our position very well.

We have no further questions, so I will pass back to the speakers.

Good. Okay. Thank you very much, everyone, for listening in. And if any further questions, just send us an e-mail or reach out in any possible means, and we will answer them. Otherwise, we will see each other later on during the day. Thank you very much.

Thank you.

Thank you. Goodbye.