Good growth, positive development in result and strong cash flow
Kista, 15 July 2020
I am happy and proud that sales, earnings and cash flow are the best that the company has reported in a second quarter ever. Revenues increased by 22 percent to SEK 987 (806) million, where strong system sales in Business Unit Nordics in combination with continued good development of the company’s contracted support and cloud services in Business Unit West have contributed to the good growth. Revenues from service operations increased by 28 percent, of which 7 percent organic, and system sales increased by 19 percent. Revenues from contracted services amounted to SEK 292 (230) million, of which cloud services increased by 48 percent to SEK 181 (122) million during the quarter. Service revenues have developed positively from the company PeopleWare, which was acquired last year. Adjusted EBITA increased by as much as 53 percent in the quarter to SEK 56.3 (36.7) million, corresponding to an EBITA margin of 5.7 (4.6) percent.
New sales of cloud services amounted to SEK 77 (96) million. The decline was mainly due to several of our customers being cautious about signing longer agreements due to the general uncertainty about the effects of the pandemic. Even for Proact, the uncertainty of the pandemic’s short- and long-term effects remains high. The company has therefore taken several measures to reduce the company’s costs by approximately SEK 40 million on an annual basis, with full effect from the fourth quarter of 2020, while we have been restrained with new recruitments.
Innovation and development of our offering has continued during the past quarter and recently a number of new cloud services were launched to the market. Wide Area Network as-a-Service (WANaaS) is an addition to our network services that enables secure and easy network connection to handle so-called multicloud solutions. The new Service Management for Public Cloud service also aims to simplify multicloud solutions for our customers who want to use public cloud services for parts of their IT infrastructure.
The need to store and secure business-critical data has been great with our customers around Europe. Among other things, we have signed a comprehensive agreement with Fortnox in Sweden with the aim of modernising their business-critical platform from which they deliver cloud-based software solutions to their customers. In addition to designing the solution and delivering the underlying systems to the platform, Proact also provides associated contracted services for operation, backup and maintenance with a focus on secure and reliable data management. The deal is representative of Proact’s strong position in the market with a portfolio of products and services that help the company’s customers to manage and create value from data.
For Proact, the pandemic has meant a time of change, where we have made the necessary adjustments to continue to meet our customers’ needs, further develop our offering and deliver our services while maintaining high quality. I am pleased with how well we have succeeded during the quarter and that it has also been reflected in a positive results development.
In conclusion, I would like to thank our CFO, Jonas Persson, who has chosen to leave after a long and successful career at the company. He will be replaced by Linda Höljö who will assume her position as CFO on 17 August.