Very strong result and good development in contracted cloud services
Kista, 11 February 2021
The fourth quarter of 2020 became yet another successful quarter for Proact, during a year where much has been different from what we have been used to. The profitability in the quarter was strong; gross margins improved somewhat from the third quarter, which in combination with continued low sales and administration expenses resulted in a historically high EBITA margin of 6.8 percent and a record high EBITA of SEK 66 million.
Revenues of SEK 982 (991) million were somewhat lower than last year, also when adjusting for exchange rates and acquisitions. Our markets are characterized by a mix of larger and smaller deals, where single large deals can impact an individual quarter. Underlying demand continues to be good on the markets where we are present, and I am convinced that we have good possibilities to reach our growth targets. Our cloud services continue to grow in line with our strategy. It is particularly positive that we closed new contracts for cloud services of SEK 142 million in the quarter. During previous quarters we have seen some hesitance among customers to enter these types of longer-term commitments during an ongoing pandemic. It is thus encouraging that we yet again were able to close cloud service deals at a high level. We see that the degree of restrictions impacts our customers’ willingness to invest short-term. At the same time, the pace of digitalization is accelerating due to changed customer behaviors, increased security demands and the need for modern workplaces, which we see as a lasting trend.
We continue to sharpen our market proposition and have during the quarter launched a further developed version of Proact Hybrid Cloud. The enhanced version provides our customers further increased flexibility when moving data between different platforms according to their demands, while at the same time keeping control over where their data is stored and how it is used.
In the beginning of the fourth quarter we acquired Cetus Solutions in the UK, which has broadened our offering in cloud and workplace solutions. The integration of Cetus and our UK subsidiary has started and is progressing very well. We have already seen possibilities for cross selling, where we sell Proact’s product to Cetus customers and vice versa. The cooperation with our vendors is also of great importance to us, and we continue to work closely with our existing strategic partners, which was confirmed by awards we received in the quarter from our two biggest partners, NetApp and Dell Technologies.
As a result of the strong development of Proact, in spite of the ongoing pandemic, our liquidity has remained strong during the year. In the spring, the dividend proposal for 2019 was withdrawn, but given the positive development, the shareholders decided on a dividend at an extra general meeting in November, which was paid out in the same month. Even after the dividend and the payment of the Cetus acquisition, our liquidity position remains strong which makes us well positioned to continue our acquisition strategy in 2021.
Finally, I want to thank all of our 1,000 employees who with big engagement and customer focus have managed to deliver products and services with high quality during the entire year, and I want to thank our 3,500 customers for their continued confidence. In summary I am very satisfied with the results both for the fourth quarter and the full year of 2020, and I look forward with confidence to a 2021 where we hopefully can return to a more normalized world and where we further can strengthen our position in our exciting markets.