CEO's statement

“Another strong quarter for Proact"

Kista, 25 October, 2022

Jonas Hasselberg


CEO's Statement

The third quarter of 2022 was yet another strong quarter for Proact, with both high revenue growth and good profitability. Revenues for the quarter amounted to SEK 1,099 million (810), which corresponds to a growth of 36 per cent. Organically the revenue growth was 21 per cent, with an organic growth of 34 per cent for systems and 6 per cent for services. Our recurring services, i.e., revenues from cloud services and support services, continues to develop strongly. In total they grew by 26 per cent, including the contribution from the ahd acquisition, to an annualized rate of SEK 1,479 million (1,177), and organically they grew by 6 per cent.

The demand for our services has continued to be good during the quarter and we closed contracts for cloud services of SEK 158 million (75), which is significantly more than last year and follows the trend we have seen during all of 2022. All of our Business Units see a clear growth from last year, except West which declines slightly. Revenues from cloud services grew by 34 per cent, of which 4 per cent organically, from SEK 178 million to SEK 239 million.

We have also signed deals for systems orders at a high pace during the quarter, with strong revenue growth in BU Nordics & Baltics as well as in BU UK and BU Central. The underlying demand is good at the same time as we have seen a contribution from shorter delivery times for some of our solutions. Our order backlog continues to be significantly higher than normal, although there has been a decline during the two past quarters.

Adjusted EBITA during the quarter increased to SEK 78 million (60) corresponding to a margin of 7.1 per cent (7.4). The increase in EBITA is primarily a result of the increased revenues. Gross margins declined compared to last year, primarily within the systems business, which was at a relatively high level during the third quarter of 2021, and this in turn also led to a lower EBITA margin.

Proact does still not see any significant impact on its business due to the war in Ukraine and the macroeconomic challenges. Increased costs for supplied goods and energy have so far had a limited effect on the profitability. However, the uncertainty remains regarding future economic growth and inflation, as well as further impact on supply chains. We monitor the development and continue to implement actions, such as price increases towards customers and efficiencies, to minimize the potential negative impact on the company.

During the quarter we concluded, as previously announced, the acquisition of sepago in Germany. The acquisition strengthens our presence in Germany and contributes with high-in-demand competence within the strategically important area of digital transformation through public cloud services. The integration has started, and we have already received the first joint deals.

Our employees are the most important asset we have, and I’m happy that our work to attract and retain competence has been noticed through us being named one of Sweden’s top ten best companies for young talents by the Swedish organisation “Karriärföretagen i Sverige”. We were also recently ranked one of the best IT companies within managed cloud services in the Netherlands, just as in Sweden before the summer, which shows that our customers also appreciate the work we do.

To conclude, we leave yet another good quarter behind us, with strong growth and good profitability.