Good sales growth and strategic acquistion in Sweden
Kista, 22 April 2021
For Proact, the start of 2021 has remained influenced by covid-19 with lockdowns and other restrictions on many of our markets. Despite this, we managed to increase our revenues compared to the same quarter 2020, both in total and organically, i.e. excluding currency exchange effects and acquisitions and disposals. Revenues amounted to SEK 894 (844) million, corresponding to a growth of 5,9%, of which 5,9% organically. Different markets have been impacted differently by the pandemic, with Nordics & Baltics and UK showing good growth, while the development in Central and West was weaker. Primarily the Netherlands, in Business Unit West, has been impacted by prolonged sales cycles which has led to a significant decline especially for systems. Our continued assessment is that it predominately is longer sales cycles, primarily due to the pandemic, rather than lost deals.
The gross profit in the quarter declined somewhat compared to the same quarter last year, primarily due to a lower gross margin in our services business and low profitability in Business Unit West. The decline is partly due to a mix shift in the service business, and for some customers we see that a larger share of employees working from home has impacted the complexity in the customers’ support needs and consequently our delivery costs,
To turn the trend with declining gross margins we have initiated several measures. During 2020 we implemented ServiceNow to automate and standardize our services business, which will enable efficiencies. We are also working closely with our customers to develop high quality services which create value and thus the opportunity for adequate margins for us. In addition, a specific action program has been initiated focused on improvments in both the system and service business in Business Unit West. Adjusted EBITA in the quarter was SEK 41,6 (42,6) million, where a lower gross profit was compensated by continued low sales and administration costs. We continued to close managed cloud deals on a high level and new contracts for managed cloud services amounted to SEK 78 (51) million in the quarter, which gives a good basis for growth in the services business.
After the end of the quarter, we announced the completion of the acquisition of Conoa, a Swedish fast-growing company with specialist competence in modern platforms based on cloud technologies. Conoa is a very exciting company with very competent employees, which provides the foundation to an even stronger offering within cloud services and next generation infrastructure solutions.
As another element of our strategic focus on cloud services, we have also entered into a partnership with LogicMonitor, which will enable improved monitoring services based on industry leading tools within AIOps (artificial intelligence for operations). To conclude, I see that we, despite a continued impact from the pandemic, continue to be well positioned and have taken important steps in further strengthening our offering within cloud services.